JPMorgan Chase: Bitcoin liquidation activity ends this month! The market will rebound in August

This site (120bTC.coM): JPMorgan Chase and Bitfinex both issued reports stating that with the end of liquidation activities and selling by short-term holders, the market is close to bottoming out and is expected to rebound in August.

JP Morgan: The market will rebound in August

CoinDesk quoted a JP Morgan research report stating that the crypto market is expected to start rebounding in August and liquidation activities will be completed by the end of July.

As Bitcoin reserves on major exchanges have declined over the past month, JPMorgan Chase also revised down its year-to-date net inflow forecast for the crypto market from $12 billion to $8 billion.

The report mentioned that the decline in Bitcoin reserves may be due to the Bitcoin liquidation by creditors of Gemini, bankrupt exchange Mt. Gox, or the sale of Bitcoin by the German government.

Is Bitcoin overvalued compared to gold?

A JP Morgan analyst team headed by Nikolaos Panigirtzoglou wrote in a report: The forecast net flow will decrease mainly due to the decline in Bitcoin reserves over the past month. And we are skeptical about the possibility that the previously expected net inflow of US$12 billion will continue throughout the year, because the cost of Bitcoin production is still high relative to the price of gold.

The report highlights that the crypto market is expected to begin to resume growth in August as liquidation activities end.

Bitfinex: Short-term holders have completed their selling

Bitfinex analysts also believe that the market is close to bottoming.

Citing derivatives market data, it pointed out that Bitcoin price volatility has begun to decrease because the spread between "implied volatility" and "historical volatility" has narrowed by nearly 90%, indicating that traders expect Bitcoin prices to Stable within the range.

Analysts pointed out: The sell-off by short-term holders may be nearing an end. We note that the short-term holders’ cost-to-profit ratio (SOPR) is 0.97, indicating that short-term holders are selling at a loss, which has happened in the past. In this case, as the selling pressure eases, the price will rebound.

Spent Output Profit Ratio (SOPR) is used to measure the realized profits and trends of Bitcoin. A SOPR value greater than 1 represents realized profits, less than 1 represents realized losses, and equal to 1 represents break-even. When SOPR is too low, it may indicate that the market is oversold and there is an opportunity for upside.

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