Summary
- JPMorgan said it sees the possibility that as outflows from Bitcoin ETFs and Ethereum ETFs have slowed since bottoming in January, most of the broader market’s selling pressure may have been alleviated.
- JPMorgan added that perpetual futures and CME futures positioning data also show investor positioning has stabilized since January, and that the risk of additional forced liquidations has declined as leveraged positions have been reduced.
- JPMorgan added that if ETF fund flows move into a recovery phase, spot-market selling pressure may also ease gradually.
An analysis suggests that as outflows from cryptocurrency exchange-traded funds (ETFs) ease, most of the broader market’s selling pressure may have been relieved.
According to crypto-focused media outlet CoinDesk on the 8th (local time), JPMorgan assessed that the outflow trend seen in Bitcoin (BTC) and Ethereum (ETH) ETFs has slowed, with January marking the trough. The bank said the recent price correction appears to be the result of position adjustments rather than structural market stress.
JPMorgan also noted that derivatives-market indicators are sending the same signal beyond ETF flow dynamics. Data on perpetual futures and Chicago Mercantile Exchange (CME) futures positioning likewise show that investor positioning has been stabilizing since January.
In particular, the bank said the reduction in leveraged positions has progressed to a significant extent, lowering the risk of additional forced liquidations. This suggests that near-term downside pressure could be limited.
The bank added that if ETF fund flows enter a recovery phase, selling pressure in the spot market may also ease gradually.
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