• Crypto Market Rebound Expected in August, Liquidations to Finish By July-End: JPMorgan
• The bank reduced its year-to-date crypto market net flow estimate to $8 billion due to a decline in bitcoin reserves across exchanges in the past month.
• JPMorgan expects the crypto market to rebound in August after liquidations finish by the end of July.
The bank reduced its year-to-date crypto market net flow estimate to $8 billion due to a decline in bitcoin reserves across exchanges in the past month.
Crypto Market Rebound
JPMorgan analysts said in a note on Friday they expect the crypto market to recover in August after an extremely challenging June.
The bank reduced its year-to-date crypto market net flow estimate to $8 billion from $15 billion due to the decline in bitcoin reserves across exchanges in the past month. Reserves have fallen by around 70,000 bitcoin year-to-date.
JPMorgan said bitcoin reserves across exchanges are a key metric to gauge institutional involvement in crypto markets. The decline suggests institutions are continuing to buy bitcoin to hold off exchanges despite recent weakness in the crypto market.
Liquidations to Finish By July-End
The bank expects the liquidation after the collapse of the Terra ecosystem to finish by the end of July. That will set the stage for a potential market recovery in August.
JPMorgan estimates around $411 million of selling pressure has come on bitcoin and $167 million on ether related to liquidations of leveraged positions on centralized exchanges since Terra’s collapse in early May.
Conclusion
The analysts said bitcoin’s fair value is around $38,000 based on its volatility-to-volume ratio, a valuation measure that compares an asset’s volatility to the amount traded. That suggests the crypto market is undervalued after falling below $20,000 last month.
