JPMorgan: "Crypto bear market in its final phase...a bottoming process has begun"

An analysis says the cryptoasset (cryptocurrency) bear market has entered its final stage. The view is that bitcoin spot ETFs and futures-market indicators are simultaneously flashing bottoming signals.

On the 8th (local time), JPMorgan’s research team said in a report that “signs of stabilization are being detected across the broader cryptoasset market,” adding that “the position reductions by retail and institutional investors that have continued since last quarter now appear to be over.”

JPMorgan explained that “as outflows from bitcoin and ether ETFs have eased, the market appears to have entered a bottoming phase,” and that “positioning indicators in the perpetual futures market and in Chicago Mercantile Exchange (CME) bitcoin futures also show selling pressure is moderating.”

A key catalyst for the market’s stabilization was cited as a decision by MSCI (Morgan Stanley Capital International). On the 6th, MSCI decided not to remove crypto-holding companies such as Strategy from its global indexes in the regular index rebalancing scheduled for February 2026.

JPMorgan assessed that “while MSCI left room by saying it will review its future approach, the decision to postpone an immediate removal gave related companies at least temporary relief.”

It also said the recent market correction was not due to deteriorating liquidity. Based on an analysis of liquidity indicators—such as the magnitude of price moves relative to trading volume in CME futures and ETFs—there is little evidence that a lack of liquidity fueled the selling.

JPMorgan analyzed that “the real driver of the correction was risk-off sentiment triggered on Oct. 10, when MSCI hinted at the possibility of excluding MicroStrategy from indexes,” adding that “with that fear now fading and fund flows and positioning indicators stabilizing, the worst appears to be over.”