Season of Bitcoin “Long Liquidation” is Over: JPMorgan Analysts
Since last week, leading cryptocurrency Bitcoin (BTC) and other digital assets have been caught in a broad market decline which has seen most of them losing a significant percentage of their prices.
However, a recent research report by financial service company JPMorgan Chase has highlighted that the recent selloffs in crypto markets and long position liquidations may be coming to an end.
The much-talked-about liquidation has caused BTC to fall below $26,000 and the coin dropped as low as $25,600 over the past week. In the past two weeks, Bitcoin has seen about a 12% drop in price.
As Positive News Fades, Bitcoin Prices Drop
The bout of recent favourable conditions including Ripple’s victory against the United States Securities and Exchange Commission (SEC) in court, the introduction of PayPal’s stablecoin PYUSD, and positivity towards an approval for spot BTC Exchange Traded Fund (ETF) helped crypto traders to establish their bullish positions on Bitcoin, the JPMorgan analysts clarified.
Nikolaos Panigirtzoglou, the lead JPMorgan analyst noted that as these positivities begin to fade gradually, it comes with a restrained potential for a decline in the digital asset markets in the short term.
“The fading of the above previously positive news has induced a wave of long position liquidations in recent weeks that are still reverberating. As a result, we see limited downside for crypto markets over the near term,” the analysts wrote.
While investors look out for a potential positive momentum for Bitcoin, it is worth noting that the token price is currently in a precarious position where it may plunge to $20,000 and the technical outlook on the daily chart has affirmed this stance.
Bitcoin Shows Signs of Comeback
Recently, the coin showed signs of a comeback. At the time of this writing, Bitcoin price was trading at $25,931, after dropping 0.68% of its gain from the previous day, according to on-chain data. This further underscores JPMorgan analysts’ view that the season of BTC long liquidation is over.
These analysts evaluated open interest in Chicago Mercentile Exchange (CME) Bitcoin futures positions, and came to the conclusion that the process of closing out long positions is fast nearing the end than being in its early phase.
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