- The bear market in bitcoin is ongoing as momentum traders unwind their positions, JPMorgan said in a note on Wednesday.
- The bank is looking for signs of new institutional adoption to help lift bitcoin from its rut.
- “We believe that the share of bitcoin in the total crypto market would have to normalize further and perhaps rise above 50%” to end the current bear market, JPMorgan said.
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The ongoing bear market in bitcoin is showing no signs of ending anytime soon, JPMorgan said in a note on Wednesday.
The bank is looking for indications that the worse in bitcoin’s price decline may be behind us, but in order to argue that the bear market is over, JPMorgan wants to see bitcoin’s valuation share of the entire cryptocurrency market rise to above 50%.
“We believe that the share of bitcoin in the total crypto market would have to normalize further and perhaps rise above 50% (as it did previously towards the end of 2018) to be more comfortable in arguing that the current bear market is behind us, “JPMorgan explained.
Bitcoin’s valuation share of the entire cryptocurrency market peaked near 70% earlier this year. It currently stands around 46%, according to the bank. Not helping bitcoin is the continued unwind in positions by momentum traders, the bank noted.
Additionally, JPMorgan is looking for increased uptake in bitcoin by institutional investors. And while some institutions like Ark Invest and MicroStrategy have been buying bitcoin in recent weeks, these purchases are not as encouraging as they might appear, according to JPMorgan.
“These institutional announcements are far from encouraging as they do not reflect new entrants, but rather existing investors with a vested interest in propping up bitcoin prices,” JPMorgan said.
Those purchases by ARK Invest have come around the key $30,000 level, which is viewed as an important level of technical support that could dictate the future direction of bitcoin prices. On Wednesday, bitcoin successfully tested that level and surged as much as 10% amid an ongoing discussion amid bitcoin bulls Elon Musk, Jack Dorsey, and Cathie Wood.