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Bitcoin and Crypto Market to Rebound in August, JPMorgan Says
JPMorgan says the cryptocurrency market will see a modest recovery starting in August, but it has reduced net flows year-to-date from $12 billion to $8 billion.
The bank’s analysts shared the new crypto forecast in a research note, suggesting that the crypto market is likely to see liquidations begin to decline this month. The Wall Street giant’s bullish projection comes as crypto markets continue to hover in the red after a particularly brutal June.
Bitcoin Pricewhich had reached highs of $73,000 in March, suffered a sharp decline last month due to selling pressure.
Catalysts for the decline included miners dumping BTC after network rewards were cut in half. post-halving, and the recent wave of dumping by the German government. The market also reacted sharply to the news of the impending Mt. Gox refunds.
BTC is currently trading around $57,330, down over 13% in the past month. Bitcoin has been hovering near support zones in recent weeks, with analysts suggesting that bears could target the $50,000 area.
JPMorgan downgrades net flow estimates
In their research note to investors, JPMorgan analysts said liquidations are likely to dissipate significantly by the end of July. After that, Bitcoin and the broader cryptocurrency market could start to rally.
However, JPMorgan has revised its net flow estimates to $8 billion, expressing skepticism over the previous projection of $12 billion. In addition to the fact that BTC is priced high relative to its production cost and relative to gold, the bank’s analysts also point to the decrease in foreign exchange reserves and broader selling pressure are the main reasons.
The decline in Bitcoin reserves could be attributed to liquidations, mainly by creditors of Gemini or Mt. Gox. In addition, the German government’s large dump, which held 50,000 BTC seized from a piracy site, has sold most of it in recent weeks.
On-chain data Shows The German government wallet currently contains approximately 4,925 BTC, worth approximately $283 million. When German police seized the BTC from Movie2k, it was worth approximately $2 billion and has since reached $3.6 billion.