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The recent selloff in crypto markets is likely near an end, with long-position liquidations “largely behind us,” according to a research report by JPMorgan Chase & Co.
The fading of some positive legal and regulatory news induced a wave of selling in recent weeks that is “still reverberating,” though the unwinding appears to be at its end phase, based on open interest in CME Bitcoin futures contracts, analysts including Nikolaos Panigirtzoglou said.
A decline in open interest — the number of unsettled and active future contracts trading on exchanges — typically indicates a price trend is losing strength.
“As a result, we see limited downside for crypto markets over the near term,” they said.
Bitcoin, the largest crypto token, was down 0.2% at around $25,980.
In the past two weeks, it has fallen almost 12% after trading sideways for about a month.
Earlier in the summer, Bitcoin got a burst from several developments seen as positive for the industry.