The recent downward trend in the cryptocurrency market seems to be nearing its end, as the latest research from JPMorgan indicates that most of the liquidation of long positions has been completed.
According to a Bloomberg report, analysts from the US bank estimate that the “bulk of it is behind us.” This prediction is based on the open interest in Bitcoin (BTC) futures contracts on the Chicago Mercantile Exchange (CME), showing that the selling trend might soon lose momentum. Open interest, referring to active futures contracts, serves as an indicator of market sentiment and the strength of price trends.
According to these analysts, the decrease in open interest for Bitcoin is seen as a sign that the current price trend might be weakening. “As a result, we see limited downside for the cryptocurrency market in the near term.”
The report notes that cryptocurrency prices have been on a decline in recent weeks due to decreasing optimism about regulatory developments in the US.
Positive developments in the previous months had propelled the price of Bitcoin. Among these were a series of applications for the first-ever physically settled Bitcoin ETFs in the US. The list of players awaiting regulatory approval includes BlackRock, Fidelity, ARK Investments, and 21Shares, as well as several other asset managers.
Another positive development was Ripple Labs’ partial victory against the US Securities and Exchange Commission (SEC). However, this optimism is waning, the analysis notes, as traders await decisions on the Bitcoin ETFs and uncertainties arising from the SEC’s appeal against Ripple.