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Crypto Liquidations Decline, BTC and Crypto Market Rebound: JP Morgan
Bitcoin and the Cryptocurrency Market on the Rise
In a recent research report on Thursday, JP Morgan said that crypto liquidations are expected to decline this month and that the market should see a massive rebound from August onwards. The bank also cut its estimate of year-to-date crypto net inflows from $12 billion previously to $8 billion in an updated projection.
According to the report, the Wall Street firm revealed that it is skeptical of its previous estimate of $12 billion for the rest of the year, given the high price of Bitcoin compared to its production cost or the price of gold.
Analysts led by Nikolaos Panigirtzoglou wrote that “the reduction in estimated net flow is largely due to the decline in Bitcoin reserves on exchanges over the past month.”
The cause of the decline in reserves
The bank said the decline in reserves likely reflects bitcoin liquidations by creditors of Gemini or the defunct cryptocurrency exchange Mt. Gox, or sales by the German government as it unloads cryptocurrencies seized from criminal activity.
The ongoing sell-off of BTC by the German government has been a concern for the market. The seizure of over $2 billion in the leading cryptocurrency has led to massive sell-offs in recent weeks, and the asset’s price has reflected the growing pressure.
The bank’s revised estimate of $8 billion includes $14 billion in net inflows into crypto funds through July 9, $5 billion in Chicago Mercantile Exchange (CME) forward inflows, $5.7 billion in fundraising by crypto venture capital funds since the start of the year, minus a $17 billion adjustment to account for rotation from exchange portfolios into new spot bitcoin exchange-traded funds (ETFs).
Bitcoin slightly recovers
Bitcoin is currently trading at $57,820. The coin has fallen more than 12% in the past 30 days, according to CoinMarketCap. However, it is slightly reversing its trend amid positive US inflation data revealed today.