Bitcoin Analysts Warn of Further Correction as BTC Remains Overbought
Bitcoin (BTC) recently experienced a sharp correction followed by a rebound, but according to JPMorgan analysts, the largest cryptocurrency is still in “overbought territory.” This suggests that BTC could potentially fall further in value. The analysts, led by Nikolaos Panigirtzoglou, stated that two metrics – JPMorgan’s futures position proxies and the bitcoin futures price premium over the spot – indicate that bitcoin remains overbought despite the recent correction.
“Profit Taking is More Likely to Continue”
While there is significant optimism in the market about bitcoin’s price rising by year-end, fueled by expectations of sustained demand through spot ETFs, recent data shows a slowdown in net inflows into these ETFs. This challenges the belief in a continuous one-way flow of funds into spot ETFs, according to JPMorgan analysts. They believe that as the halving event approaches, profit-taking is more likely to continue. This is especially true considering the overbought positioning backdrop despite the recent correction.
The JPMorgan analysts previously predicted that bitcoin’s price would drop to around $42,000 after the halving due to reduced miner rewards and higher production costs.
Hot Take: Bitcoin Remains Overbought Despite Recent Correction
Despite experiencing a sharp correction and subsequent rebound, Bitcoin continues to be considered overbought by JPMorgan analysts. Two key metrics indicate this: JPMorgan’s futures position proxies and the bitcoin futures price premium over the spot. While there is optimism about bitcoin’s price rising by year-end, recent data shows a slowdown in net inflows into spot bitcoin ETFs. This challenges the belief in a continuous one-way flow of funds into these ETFs. As the halving event approaches, profit-taking is more likely to continue. The JPMorgan analysts previously predicted a drop in bitcoin’s price after the halving due to reduced miner rewards and higher production costs.
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