JPMorgan says bitcoin remains in 'overbought territory' despite recent correction
Bitcoin remains in ‘overbought territory’ despite the past week’s correction, according to JPMorgan analysts.Last month, the analysts said the bitcoin price would likely drop to around $42,000 after the upcoming halving event.
JPMorgan analysts led by Nikolaos Panigirtzoglou wrote in a note on Thursday that two metrics — JPMorgan's futures position proxies and the bitcoin futures price premium over the spot — suggest bitcoin is still overbought.
These metrics indicate only small unwinding of positions so far, according to the analysts. "Both metrics indicate that bitcoin remains in overbought territory despite the sharp correction over the past week," they said.
'Profit taking is more likely to continue'
There is significant optimism in the market about bitcoin prices rising by year-end, fueled by expectations of sustained demand through spot ETFs despite a reduction in bitcoin supply after the halving event . However, recent data shows a slowdown in net inflows into spot bitcoin ETFs, challenging the belief in a continuous one-way flow of funds into spot ETFs, according to the JPMorgan analysts.
"In fact, as we approach the halving event, this profit-taking is more likely to continue, particularly against a positioning backdrop that still looks overbought despite the past week's correction," the analysts concluded.
Last week, the analysts predicted that bitcoin's price would likely drop to around $42,000 after the halving, citing reduced miner rewards and higher production costs.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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