Despite recent bearish trends in the cryptocurrency market, JP Morgan has maintained a bullish stance on the Bitcoin price outlook. The multinational finance company has announced a timeline for the conclusion of ongoing BTC liquidations and predicts a subsequent rebound in the market. According to a research report released by JP Morgan, the bank suggests that BTC liquidations should abate in July, paving the way for a strong bull market as bearish trends caused by sell-offs subside.
While JP Morgan believes that a market recovery is imminent, the bank is skeptical about the sustainability of high Bitcoin inflows in its year-to-date flow into crypto assets. The company has revised and significantly reduced its former year-to-date crypto net flow from $12 billion to $8 billion. It is worth noting that Spot Bitcoin ETFs have been the major driver for substantial inflows into the crypto market this year.
JP Morgan’s skepticism regarding Bitcoin’s future prospects also stems from the cryptocurrency’s high price relative to its production cost and the price of gold. A crypto analyst from the bank, Nikolaos Panigirtzoglou, has suggested that the reduction in the estimated year-to-date net flow was influenced by the recent decline in Bitcoin reserves across exchanges. The decline in Bitcoin reserves over the past month is believed to be a result of ongoing selling pressures and widespread BTC liquidations executed by Mt Gox creditors and the German government.
JP Morgan has predicted that the BTC sell-off will officially end in July, leading to a substantial bullish rally for Bitcoin in August. Following the bank’s predictions, many crypto analysts and community members have suggested that the recent upsurge in Bitcoin’s price is the continuation of a strong bull market. A crypto analyst known as ‘CryptoYoddha’ has revealed that the German government was preparing to sell their remaining BTC just before the bull run. Despite the aggressive selling by the German government and the subsequent market turmoil, the analyst noted that Bitcoin still appears bullish.
Earlier in June, Mt Gox announced that it would start making repayments to creditors in July. While this decision comes as good news to creditors, there is an underlying unease concerning potential Bitcoin sell-offs. With creditors steadily receiving part of Mt Gox’s 142,000 BTC payment worth about $9 billion, there are justified fears in the market as a widespread Bitcoin dump would have a major impact on the cryptocurrency’s price. In addition to Mt Gox’s substantial Bitcoin redistribution plans, the German government has also been seen selling almost 100% of its Bitcoin holdings seized from criminals. These substantial crypto liquidations have put a major damper on the price of Bitcoin, triggering serious price declines that have significantly delayed the highly anticipated Bitcoin bull run.