Bitcoin Rally Losing Momentum, Correction Imminent, Warns JPMorgan

Despite a recent recovery, Bitcoin remains overbought according to JPMorgan analysts, indicating potential for further declines. Futures position proxies and Bitcoin futures price premium over spot suggest the cryptocurrency is still in overbought territory, with only minor position reductions observed.

Is Bitcoin's Rally Running Out of Steam?

JPMorgan analysts are sounding the alarm on Bitcoin's recent surge, warning that it could be due for a correction. Despite recovering from last week's plunge, the cryptocurrency remains "overbought," according to their futures position proxies and price premium analysis.

Overbought and Overdue for a Correction?

JPMorgan's data suggests that Bitcoin's current rally is unsustainable. Despite some modest position reductions, the crypto remains in overbought territory, leaving it vulnerable to further declines. This raises concerns about whether the recent optimism for Bitcoin's price in the coming months is misplaced.

ETF Inflows Slowing Down

Adding to the skepticism, recent data shows a slowdown in net inflows into spot ETFs. This casts doubt on the belief that there will be a continued flow of funds into these instruments, which have been a major driver of Bitcoin's recent gains.

Halving on the Horizon

With the upcoming halving of Bitcoin supply, JPMorgan analysts believe that profit-taking is likely to continue. Given the current overbought position, they see this as a prime opportunity for investors to cash out.

Conclusion

While Bitcoin has rebounded from its recent dip, JPMorgan's analysis suggests that the rally could be running out of steam. The overbought position, slowing ETF inflows, and approaching halving all point to the possibility of a correction. Investors should be cautious and consider taking profits before the market turns against them.