Bitcoin Is Still In The Overbought Zone, This Is According To JPMorgan's Analysis

Bitcoin prices are said to be overbought. (Photo; Doc. Unsplash)

JAKARTA - JPMorgan's leading investment bank warns that despite a recent drop in prices, Bitcoin is still in a 'overbought' condition. Bank analyst, led by Nikolaos Panigirtzoglou, predicts that selling pressure on Bitcoin is likely to continue ahead of haloing, which is expected to occur in the near future.

For information only, overbought conditions in the context of crypto trading can indicate that asset prices have risen too high and may experience a correction or price drop.

According to JPMorgan's analysis, two main indicators of the futures position and futures price comparison with spot prices show that Bitcoin is still in the 'overbought' zone, even after last week's significant price corrections. This raises speculation that the price of Bitcoin could decline further.

In addition, JPMorgan noted a slowdown in the inflow into the spot's Bitcoin ETF, which raises doubts about market optimistic predictions regarding price hikes by the end of the year. While there is high hopes for continued demand from Bitcoin ETF and the impact of halving, recent data suggest that the flow of funds to the spot ETF may not be as strong as anticipated.

In recent weeks, 10 Bitcoin spot ETFs that started trading at the start of the year have experienced a withdrawal of funds, while the Grayscale Bitcoin (GBTC) trust continues to experience significant outflows. However, another nine Bitcoin spot ETFs, excluding GBTC, managed to raise about $1.3 billion in Bitcoin in just six days.

Approaching haloing, JPMorgan predicts that this trend of profit-taking will continue, mainly due to a position that is still 'overbought'. Last month, the bank also issued a bearish warning, predicting a drop in Bitcoin prices to US$42,000 (around Rp663.3 million) after April's halling. They also underestimated the impact of the upcoming Having and Ethereum upgrades, assuming that the market had taken both events into account.

JPMorgan CEO Jamie Dimon remains skeptical of crypto, stating that he will never buy Bitcoin personally. Meanwhile, other analysts observed that interest in Bitcoin ETF has declined, following a sluggish Bitcoin price trend. Some analysts even say that the price of Bitcoin will enter a "danger zone" ahead of Halving.