Worst of Recent Bitcoin (BTC) Correction Has Passed, JPMorgan Says

According to analysts at JPMorgan, Bitcoin (BTC) is currently experiencing “limited downside” after undergoing a correction that brought the popular cryptocurrency down to $25,000. Nikolaos Panigirtzoglou, who authored a research report reviewed by Bloomberg, attributes the recent wave of selling to legal and regulatory news, which is still having an impact.

Panigirtzoglou believes that the sell-off is close to its end phase, as evidenced by the open interest (OI) on Bitcoin futures contracts on the Chicago Mercantile Exchange (CME).

A high amount of OI on futures typically indicates a market that is overly optimistic and prone to liquidation cascades, whereas lower OI suggests that most of the selling pressure has already been exhausted in the near future.

“As a result, we see limited downside for crypto markets over the near term.”

Market analysts suggest that investors are currently awaiting a decision on a Bitcoin exchange-traded fund (ETF) and the outcome of the U.S. Securities and Exchange Commission’s (SEC) case against Ripple, a payments firm.

The SEC accused Ripple of selling XRP as an unregistered security in late 2020, and while they achieved a partial victory last month, the anticipation of their appeal is causing uncertainty in crypto markets and making them responsive to any further developments. As of writing, Bitcoin is trading at $26,001.

Arthur Hayes, the founder of BitMEX and a seasoned crypto expert, has shared his thoughts on the current market downturn and the future of Bitcoin (BTC).

According to his recent blog post, Hayes suggests that Bitcoin and other cryptocurrencies could benefit from the interest income generated by US government bonds.

Despite some forecasts predicting a significant drop in value, Hayes believes that Bitcoin will only experience a mild decline of less than 5% from its current level. Check out the latest news about this in our previous article.