JPMorgan Revises Crypto Market Forecast, Now See a Decent Bounce Starting in August

Analysts at the bank shared the new forecast for crypto in a research note, suggesting the crypto market should see liquidations begin to subside this month.

Banking giant JPMorgan has predicted a decent recovery for the crypto market beginning in August. However, the bank has reduced its year-to-date net flow estimates from $12 billion to $8 billion.

In a research note, analysts at the bank shared the new forecast for crypto, suggesting that the crypto market should see liquidations begin to subside this month.

The bullish projection from the Wall Street giant comes as crypto markets continue to hover in the red after a particularly brutal June.Bitcoin price, which reached highs of $73,000 in March, retreated heavily last month amid sell-off pressure.

Some of the catalysts for the decline included miner offloading of Bitcoin (BTC) after the network rewards were reduced by half post-halving, and the German government's recent dumping spree. The market also reacted sharply to the news of the imminent Mt.Gox repayments.

BTC currently trades around $57,330, down more than 13% in the past month. In recent weeks, Bitcoin has hovered near support zones, with analysts suggesting that bears could target the $50,000 area.

JPMorgan revises down net flow estimatesIn their research note to investors, JPMorgan analysts said liquidations are likely to dissipate significantly by the end of July. Afterward, BTC and the broader crypto market may begin to rise.

However, JPMorgan has revised its net flow estimates down to $8 billion, expressing skepticism about the previous projection of $12 billion. Besides BTC’s price being high relative to its production cost and relative to gold, the bank’s analysts also highlight the decrease in exchange reserves and broader sell-off pressure as key reasons.

The decline in Bitcoin reserves could be attributed to the liquidations, mainly by Gemini or Mt. Gox creditors. Moreover, the extensive dump by the German government, which held 50,000 BTC seized from a piracy site, has sold the majority of it over the past few weeks.

On-chain data shows the German government’s wallet currently holds roughly 4,925 BTC, approximately worth $283 million. When the Germany police seized the BTC from Movie2k, its value was about $2 billion and rose to reach $3.6 billion.

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