The experts claim that these data only show a minimal amount of position unwinding so far.
Bitcoin’s price dropped 9% in the last week and is now trading at $65,472.
This past week, Bitcoin’s inherent volatility was on full display, thrusting it back into the spotlight. With all the ups and downs, Bitcoin’s price dropped 9% in the last week. At the time of writing, it is trading at $65,472.
Despite Bitcoin’s slight recovery this week, the biggest cryptocurrency by market cap is still in “overbought territory,” according to JPMorgan analysts, who predict that the price of BTC might fall much further.
Two indicators, namely JPMorgan’s futures position proxies and the premium of the bitcoin futures price over the spot, indicate that bitcoin is still overbought, according to a note written by JPMorgan analysts headed by Nikolaos Panigirtzoglou on Thursday.
Profit-taking More Likely to Continue
The experts claim that these data only show a minimal amount of position unwinding so far. They said that despite the steep drop in value over the last week, both indicators show that bitcoin is still in the overbought zone.
Expectations of continuous demand via spot ETFs, along with a drop in bitcoin supply after the halving event, have stoked market confidence about bitcoin prices climbing by year-end. But new numbers reveal that net inflows into spot bitcoin ETFs have slowed, which challenges the idea that money is flowing into spot ETFs continuously, according to the analysts at JPMorgan.
The analysts added:
“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.”
Moreover, analysts forecasted last week that, due to decreased miner payouts and increased production costs, the price of bitcoin will probably fall to about $42,000 after the halving.