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Bitcoin returns to 98K, JPMorgan warns
JPMorgan analysts warned that institutional demand for Chicago Mercantile Exchange (CME) Bitcoin and Ether futures is weakening, which is a bearish signal for the cryptocurrency market in the short term.
The total market value of cryptocurrencies has dropped by 15% from its historical high of $3.72 trillion on December 17 to around $3.17 trillion. JPMorgan pointed out in its report on Wednesday that this downturn has led to a 'backwardation' in CME's BTC and Ether futures, meaning that the futures price is lower than the spot price, mirroring the situation in June and July last year.
This is a negative development, indicating weak demand from institutional investors using regulated CME futures contracts to invest in these two cryptocurrencies.
JPMorgan pointed out that the lack of regulatory easing catalysts, as well as the continued reduction of risk exposure by momentum-type funds such as commodity trading advisors, further suppress demand, and the cryptocurrency market may continue to face pressure in the short term.