JPMorgan Chase: Demand for BTC and ETH futures weakens, and the crypto market faces short-term downside risks

Odaily Planet Daily News: Analysts including JPMorgan Managing Director Nikolaos Panigirtzoglou wrote in a report on Wednesday that the total market value of cryptocurrencies has fallen 15% from the all-time high of $3.72 trillion set on December 17 to around $3.17 trillion. The decline has caused the Chicago Mercantile Exchange's Bitcoin and Ethereum futures to approach "spot premium", that is, the futures price is lower than the spot price, which is exactly the same as in June and July last year. JPMorgan believes that the cryptocurrency market faces downside risks in the short term due to weakening institutional demand for Chicago Mercantile Exchange (CME) Bitcoin and Ethereum futures. Analysts explained that when demand for Bitcoin and Ethereum futures is strong, they usually trade at a higher price than the spot price, a state known as "positive spread". When demand and price expectations weaken, futures may fall below spot prices, as happened in June and July last year. JPMorgan analysts attributed the weakening demand for CME Bitcoin and Ethereum futures to two key factors. First, some institutional investors appear to be taking profits due to the lack of direct positive catalysts. Analysts say the new U.S. government is unlikely to introduce major cryptocurrency-related initiatives before the second half of this year, and investors will remain on the sidelines. Second, momentum-driven funds such as commodity trading advisors have been reducing their exposure, further suppressing demand. "Momentum signals for both Bitcoin and Ethereum have been declining over the past few months, and Ethereum's momentum signal has turned into negative territory," the analysts said.