In a recent report, JPMorgan analyst Nikolaos Panigirtzoglou stated that he believes the weakness in Bitcoin is approaching its end phase. Panigirtzoglou attributed the recent decline in Bitcoin’s price to the liquidation of long positions as positive news in the crypto market began to fade. However, he believes that this unwinding of long positions is nearing its conclusion and expects limited downside for crypto markets in the near term.
It is important to note that Bitcoin is not the only asset that has experienced a decline in recent weeks. Concerns surrounding China and higher real yields in the US have also affected the tech space, with the Nasdaq Composite down about 7% from its recent high.
While there have been positive developments in the crypto market, such as PayPal’s introduction of its own stablecoin and the launch of Coinbase Global Inc.’s “Base,” investors are remaining cautious as they await regulatory clarity. The Securities & Exchange Commission’s appeal of the recent decision in favor of Ripple has added to the uncertainty, as a new trial could induce further legal uncertainty for cryptocurrencies.
Additionally, Federal Reserve Chair Powell’s statement at the Jackson Hole symposium that rates may go higher and the lack of intentions to cut rates in the near term does not bode well for cryptocurrencies.
Overall, Panigirtzoglou believes that the worst may be behind Bitcoin and the crypto market, with the unwinding of long positions reaching its end phase. However, investors are likely to remain cautious due to regulatory uncertainties and the broader market conditions.