JPMorgan Chase points to weak Bitcoin futures as a sign of a bear market

JP Morgan’s cryptocurrency market analyst pointed to Bitcoin (Bitcoin) Spot prices and BTC futures prices serve as potential bearish signals in the market.

In a report to clients on Thursday, a JPMorgan Chase analyst led by global market strategist Nikolaos Panigirtzoglou wrote that the Bitcoin market has returned to a situation where spot prices are higher than futures prices. Analysts said that the pullback in the crypto market in the past month caused Bitcoin futures to reverse to a spot premium for the first time since 2018.

According to strategists, although the Bitcoin futures premium should be seen as a negative signal for BTC prices The market rebounded sharply In the past two days, with Bitcoin reaches 37,500 USD Thursday. Analysts emphasized that the Bitcoin futures curve was at a discount for most of 2018, and Bitcoin fell by 74% this year Set an all-time high of US$20,000 At the end of 2017:

“We believe that the return to spot premiums in recent weeks is a negative sign pointing to a bear market. […] In our view, the shift of Bitcoin futures to spot premiums is a bearish signal that echoes 2018. “

In the latest analysis, JPMorgan Chase specifically studied the second 21-day moving average of the price difference between Bitcoin futures and spot prices. Analysts observed “abnormal developments in the trading of futures contracts on the Chicago Mercantile Exchange and a reflection of institutional investors’ current weak demand for Bitcoin.”

Analysts also pointed out that the decline in Bitcoin’s share of the total crypto market value is another worrying trend. As Cointelegraph previously reported, Bitcoin’s dominance in the crypto market drops to 40% In late May, after soaring above 70% in January this year, it was the lowest share in the past three years.

At the time of writing, Bitcoin’s share it According to data from CoinMarketCap, it accounts for 43% of the total market value of cryptocurrencies, and it accounts for $682 billion in the total market value of 1.6 trillion U.S. dollars. Some analysts, such as crypto index provider Stack Funds, believe that BTC’s dominance may retest its previous highs in short term.

Historical chart of Bitcoin dominance percentage. Source: CoinMarketCap