Too Early to Characterize Bitcoin as Oversold, JPMorgan’s Note Says
JPMorgan, one of the leading investment banks around the world, has recently published a research note on Bitcoin and mentioned that it is too early to characterize BTC as oversold after the latest correction in the world’s largest digital currency.
According to a report published by Business Insider, JPMorgan’s research note highlighted a reversal of the pro-bitcoin sentiment after institutional investors returned to gold amid a surge in crypto market volatility.
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Despite its positive long-term overview, JPMorgan highlighted a spike in liquidations across the Bitcoin futures market. Yesterday, BTC saw its worst drop since March 2020. The overall market cap of digital currencies dropped by nearly $500 billion within a single day.
“The bitcoin flow picture continues to deteriorate and is pointing to continued retrenchment by institutional investors. Over the past month, bitcoin futures markets experienced their steepest and more sustained liquidation since the bitcoin ascent started last October. It is perhaps too early to characterize bitcoin as oversold. BTC-related investment products have seen a major drop in value,” JPMorgan’s research note mentioned.
Despite the latest correction, the world’s most valuable digital asset is still up by more than 40% since the start of 2021.
The BTC crash liquidated billions of dollars in long Bitcoin positions yesterday. According to the latest data published by crypto research platform Bloqport, more than 700,000 traders got liquidated yesterday. “What is striking is that the recent outflows from BTC funds have been accompanied by inflows into gold ETFs in a reversal of the last quarter of 2020 and the beginning of this year,” the bank added.
However, BTC optimism has not vanished completely due to the latest sell-off. Bill Miller, a leading American investor and fund manager said that the cryptocurrency market has seen such corrections before. “If I liked something at higher prices, it’s a safe bet I’ll like it even more at lower prices. This Bitcoin correction is right in line with moves we have seen many times in BTC,” Miller told CNBC.
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