According to a report from The Block, analysts at JPMorgan stated in a report released on Wednesday that the cryptocurrency market faces short-term downside risks due to weakened institutional demand for Bitcoin and Ethereum futures on the CME.
Led by Nikolaos Panigirtzoglou, JPMorgan analysts noted that the recent downward trend in the crypto market has brought CME Bitcoin and Ethereum futures close to a state of “backwardation,” where futures prices are lower than spot prices, similar to the situation in June and July of last year.
Lack of Positive Catalysts and Diminished Momentum
The analysts attributed the weakened demand for CME Bitcoin and Ethereum futures to two main factors. First, some institutional investors appear to be taking profits due to the lack of immediate positive catalysts. The analysts indicated that significant cryptocurrency-related policies from the new U.S. government may not be introduced until the second half of this year, causing investors to adopt a wait-and-see approach.
Second, funds relying on market momentum, such as commodity trading advisor funds, have been reducing their exposure, further dragging down demand. The analysts stated, “Over the past few months, momentum signals for both Bitcoin and Ethereum have been weakening, with Ethereum’s momentum signals having entered negative territory.”
In light of these trends, the analysts warned that the cryptocurrency market may continue to face pressure in the near term.
Why Did FamilyMart Enter the Cryptocurrency Sector? Trump’s Second Son Reveals the Truth Behind It.
He stated that the family originally had no plans to enter this field, but the banking sys…