Despite recent bearish trends in the Bitcoin market, JP Morgan has maintained a bullish stance on the cryptocurrency’s price outlook. The multinational finance company has announced a timeline for the conclusion of the ongoing BTC liquidations, predicting a subsequent rebound in the market.
According to a recent research report by JP Morgan, BTC liquidations are expected to abate in July, paving the way for the start of a strong bull market as bearish trends caused by sell-offs subside. The bank believes that a market recovery is imminent, although it remains skeptical about the sustainability of high Bitcoin inflows.
JP Morgan has revised and grossly reduced its former year-to-date crypto net flow estimate from $12 billion to $8 billion. The skepticism about Bitcoin’s high price relative to its production cost and the price of gold has led to this reduction. Moreover, recent declines in Bitcoin reserves across exchanges have also contributed to the bank’s decision.
The decline in Bitcoin reserves over the past month is believed to be a result of ongoing selling pressures and widespread BTC liquidations executed by Mt Gox creditors and the German government. While these liquidations have put a damper on the Bitcoin price, JP Morgan has predicted that the BTC sell-off will officially end in July, paving the way for a substantial bullish rally in August.
Mt Gox’s announcement of repayments to creditors in July has raised concerns about potential Bitcoin sell-offs. With creditors receiving part of Mt Gox’s 142,000 BTC payment worth about $9 billion, there is fear of a widespread Bitcoin dump that could have a major impact on the cryptocurrency’s price.
In addition to Mt Gox’s repayment plans, the German government has been seen selling almost 100% of its Bitcoin holdings seized from criminals. These substantial crypto liquidations have triggered serious price declines in the market, delaying the highly anticipated Bitcoin bull run.
JP Morgan’s bullish outlook on the Bitcoin price, despite recent market turmoil and liquidations, suggests that a strong bull market may be on the horizon. While there are concerns about the sustainability of high Bitcoin inflows and potential sell-offs from Mt Gox and the German government, the bank remains optimistic about a market recovery in the coming months. Only time will tell whether JP Morgan’s predictions will come to fruition, but it is clear that the cryptocurrency market continues to be a rollercoaster of ups and downs.
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