Nearly $2 trillion worth of value has evaporated from the crypto market over the past few months and it almost looks like the rates of most cryptocurrencies can only fall further. However, according to the largest investment bank in the world, JPMorgan, it may just be that we will finally see a bottom soon.
Is the crypto crash finally over?
According to an analyst at JPMorgan, Nikolaos Panigirtzoglou, they clearly see that there is deleveraging, but that this process is slowing down, that reports Bloomberg† Deleveraging means that the amount of leverage positions, ie long or short derivative positions, is decreasing sharply. Normally, a large amount of leverage positions, i.e. a high open interestthat the prices can react violently up or down.
Because traders have already been liquidated on a large scale and large companies that make frequent use of delivery daye, such as the Three Arrows Capital hedge fund that recently fully was liquidated, are flushed out of the market, open interest falls. According to JPMorgan, the period of intense deleveraging may soon come to an end.
This could possibly go hand in hand with the formation of a definitive bottom, according to Panigirtzoglou. In addition, venture capitalists continue to invest heavily in the crypto industry, keeping companies that are currently in trouble afloat. These things combined can possibly lead to a bottom coming.
Bitcoin bottom is coming
Also an analyst of FundstratMark Newton, recently suggested that he expects the low point to be lurking.
“Bitcoin has had great success making cyclical lows every 90 weeks for the past twelve years. Lows should be around the corner by this cycle composition, and one should be alert in July, looking to buy weakness for a healthy rebound just as sentiment appears to be reaching a bearish tipping point.”
