Despite recovering several thousand dollars in a few days, JPMorgan strategists still revealed concerns about bitcoin’s price. In their most recent note on BTC’s performance, they breached the difference between the price on the spot and futures markets as the most significant worry for bulls.
Backwardation is Still a Threat
The price of the primary cryptocurrency has been through a roller-coaster in the past few months. It went from an all-out bull run which saw its peak in mid-April at $65,000, to a massive more than 50% retracement to a low of $30,000 in mid-May.
After this slump, which some argue was caused by Elon Musk, Chinese FUD, and over-leveraged positions, the asset has recovered some ground despite failing to overcome $40,000 again.
On a shorter-term scale, BTC is up by $6,000 in two days following positive news coming from El Salvador. However, analysts from the giant multinational investment bank, JPMorgan Chase & Co, led by Nikolaos Panigirtzoglou, still see significant concerns on the horizon.
They touched upon the so-called backwardation in the futures market. Such a development occurs when the price of the underlying asset is higher on spot markets rather than future markets.
“We believe that the return of backwardation in recent weeks has been a negative signal pointing to a bear market.” – the analysts noted.
Furthermore, they breached historical performance to their point. The Bitcoin futures were in backwardation for most of 2018 – the year-long bear marker which saw BTC tumble by more than 70% since its peak.
While they have concerns about bitcoin’s price performance, the strategists recently listed three reasons why they believe ETH will outperform it in the following months.
Death Cross Looming?
Apart from the backwardation, CryptoPotato recently reported another possible development that could result in substantial price losses. It comes from the so-called death cross, which appears when the 50-day moving average drops down to the 200-day moving average.
Although history shows that BTC has previously bounced off, most analysts actually believe that it’s more likely to break below it. In the past, such occurrences have resulted in further retracements.
Consequently, some argued that bitcoin could dump below $20,000 and might bottom around $18,000.
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