JPMorgan is offering a lifeline to weary crypto investors, predicting a market rebound in August.Their recent report forecasts an end to the current wave of sell-offs by July’s close, paving the way for price recovery across the board.
Behind the Sell-Off:
The investment bank cites several factors contributing to the crypto market’s recent slump. Distressed customers of Gemini Earn, the now-defunct crypto lending platform, are forced to sell their holdings to recoup losses. Germany’s government is also offloading seized crypto from criminal activities, adding to the selling pressure. Additionally, creditors of the long-dormant Mt. Gox exchange are unloading their recovered Bitcoin (BTC), further dampening market sentiment.
Light at the End of the Tunnel:
However, JPMorgan’s analysts believe this selling pressure will taper off significantly in the coming weeks. This, coupled with a recent decline in Bitcoin reserves on major exchanges, suggests a potential price increase in August. Lower exchange reserves can indicate rising demand exceeding supply, potentially leading to higher prices as buyers scramble for a limited pool of assets.
Revised Net Flow Estimates:
The report also revises JPMorgan’s year-to-date net flow estimate for the crypto market downwards. They now predict a total net inflow of $8 billion, which is a significant drop from their previous estimate of $12 billion. This adjustment reflects the recent decline in Bitcoin’s value compared to its production cost and its historical price relationship with gold.
Cautious Optimism:
JPMorgan’s analysis offers a sigh of relief for crypto investors. While the short-term outlook might remain volatile due to ongoing liquidations, the expectation of a market rebound in August provides a reason for cautious optimism.
Disclaimer: This information is for educational purposes only and should not be considered financial advice. Please conduct your own research before making any investment decisions.
This information is not legal advice. Do your own research before making any decisions. Only invest what you can afford to lose and seek independent financial advice if needed. Understand the risks involved before purchasing any cryptoasset