Bitcoin underwent a correction last week before rebounding this week, but it still remains in 'overbought territory,' according to JPMorgan.
Bitcoin underwent a sharp correction last week before rebounding this week, but it still remains in "overbought territory," according to JPMorgan analysts, suggesting that the largest cryptocurrency by market capitalization could fall further.
JPMorgan analysts led by Nikolaos Panigirtzoglou wrote in a note on Thursday that two metrics — JPMorgan's futures position proxies and the bitcoin futures price premium over the spot — suggest bitcoin is still overbought. These metrics indicate only small unwinding of positions so far, according to the analysts. "Both metrics indicate that bitcoin remains in overbought territory despite the sharp correction over the past week," they said.There is significant optimism in the market about bitcoin prices rising by year-end, fueled by expectations of sustained demand through spot ETFs despite a reduction in bitcoin supply after the halving event.
"In fact, as we approach the halving event, this profit-taking is more likely to continue, particularly against a positioning backdrop that still looks overbought despite the past week's correction," the analysts concluded. Last week, the analysts predicted that bitcoin's price would likely drop to around $42,000 after the halving, citing reduced miner rewards and higher production costs.Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures.
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