Analysts from JPMorgan mentioned the cautious stance in a report.
The cryptocurrency market has seen heavy selling or profit-taking over the last two weeks.
For a number of reasons, such as dwindling interest from retail investors and a dearth of encouraging signs, JPMorgan maintains its previous advice to be cautious in the cryptocurrency markets going forward. On Thursday, analysts from JPMorgan, headed by Nikolaos Panigirtzoglou, mentioned the cautious stance in a report.
The analysts mentioned:
“With a lack of positive catalysts, with the retail impulse dissipating and with the three headwinds mentioned previously in our publication (elevated positioning, high bitcoin prices vs. gold and vs. the estimated bitcoin production cost, subdued crypto VC funding) still in place, we maintain a cautious stance on crypto markets over the near term.”
Retail Investors Pullback
The cryptocurrency market has seen heavy selling or profit-taking over the last two weeks, with experts speculating that retail investors may have been more influential than institutional ones. According to the analysts, retail investors seemed to liquidate their cryptocurrency and equities holdings in April.
In addition, spot bitcoin exchange-traded funds (ETFs) have seen withdrawals in April, and consumer interest in equities, as measured by metrics like net flow into equity funds, has declined over the previous month, according to their analysis.
Despite heavy purchases in February and March, the analysts noted that the net flow into equities funds became negative in April. Experts claim that institutional investors, including momentum traders, commodities trading consultants, and quantitative funds, have started cashing out of their “extreme long” bitcoin and gold holdings.
According to the analysts, CTAs and quantitative funds aren’t the only institutional investors that have been cutting down on their holdings.