JPMorgan: "The crypto downturn is in its final stage... entering the bottoming phase"

Source: HanKyungBlockchain Original Title: JP Morgan: "The Cryptocurrency Downturn Is Coming to an End... Bottoming Out Has Begun"

Original Link: https://www.hankyung.com/article/202601090468B

Analyses suggest that the downtrend in cryptocurrencies( and digital assets) is nearing its end. Indicators from Bitcoin spot ETFs and futures markets are all signaling that the bottom has been reached.

On the 8th( local time), JP Morgan's research team released a report stating, "Signs of stabilization are emerging across the entire cryptocurrency market," and "The reduction in positions by retail and institutional investors that has been ongoing since last quarter appears to have concluded."

JP Morgan added, "As the outflows from Bitcoin and Ethereum ETFs are calming down, it seems the market is bottoming out," and explained, "The positioning indicators for perpetual futures markets and Bitcoin futures on the Chicago Mercantile Exchange(CME) are also showing signs of easing selling pressure."

A key factor in the market stabilization was the decision by Morgan Stanley Capital International(MSCI). On the 6th, MSCI announced that it would not exclude companies holding cryptocurrencies from its global indices in its regular index review scheduled for February 2026.

JP Morgan commented, "While MSCI has left the door open for a future review of its policy, the immediate decision to hold off on delisting provided temporary relief to related companies," and evaluated, "The recent market correction is not due to liquidity issues. Analyzing liquidity indicators such as trading volume relative to CME futures and ETF price movements shows little evidence that a lack of liquidity is fueling the sell-off."

JP Morgan concluded, "The real cause of the correction was the risk-averse sentiment triggered when MSCI hinted at the possible exclusion of MicroStrategy from its indices on October 10th," and added, "Now that this fear has been alleviated and fund flows and positioning indicators have stabilized, the worst is over."