According to CoinDesk, JPMorgan has stated that bitcoin remains overbought, even after the recent sharp correction in the cryptocurrency market. The price of bitcoin fell by over 15% before rebounding following the Federal Open Market Committee meeting on Wednesday. In a research report, the bank noted that there is still considerable optimism in the market for prices to rise significantly by year-end, with a significant component of that optimism arising from the view that bitcoin demand via spot exchange-traded funds (ETFs) would continue at the same pace even as the supply of bitcoin diminishes after the halving event.
The quadrennial reward halving, when miners' rewards are cut in half, is expected to occur in mid-April. However, JPMorgan observed that the pace of net inflows into spot bitcoin ETFs has slowed considerably, with a significant outflow recorded in the past week. This challenges the notion that the spot bitcoin ETF flow picture will be characterized as a sustained one-way net inflow. The report suggests that profit-taking is more likely to continue as the halving event approaches, particularly against a positioning backdrop that still looks overbought despite the past week's correction.
