[Analysis] CME Bitcoin and Ethereum Futures Approach Spot Prices... "A Sign of Weakening Institutional Demand?"
Summary
- Analysis suggests that as CME Bitcoin and Ethereum futures prices approach spot prices, the cryptocurrency market could face increased short-term downward pressure.
- The expected backwardation phenomenon could signal weakening institutional investor demand, according to JP Morgan analysts.
- The cryptocurrency market is expected to face additional downward pressure in the short term due to weakening momentum and lack of catalysts, according to reports.
Analysts suggest that as Bitcoin (BTC) and Ethereum (ETH) futures prices listed on the Chicago Mercantile Exchange (CME) approach spot prices, downward pressure in the cryptocurrency market could increase in the short term.
According to crypto media The Block on the 20th, CME Bitcoin (BTC) and Ethereum (ETH) futures are expected to enter backwardation (when spot prices exceed futures prices). While futures markets typically exhibit contango (when futures prices exceed spot prices), the opposite phenomenon is currently being observed.
Nikolaos Panigirtzoglou, a JP Morgan analyst, explained, "Backwardation could be a negative signal indicating weakening demand from institutional investors trading through CME futures exchange," adding that "with weakening momentum and lack of catalysts, the cryptocurrency market is likely to face additional downward pressure in the short term."
Minseung Kang
minriver@bloomingbit.ioBlockchain journalist | Writer of Trade Now & Altcoin Now, must-read content for investors.
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