JPMorgan Chase & Co (JPM) said in a research note that an analysis of open interest in bitcoin futures on the Chicago Mercantile Exchange (CME) indicated that.
The unwinding of long positions appears to be at the end rather than the beginning.
Analyst Nikolaos Panigirtzoglou wrote that, therefore, we see limited short-term downside in the cryptocurrency market.
News of Elon Musk’s Space X selling its bitcoin holdings in the last quarter was an additional catalyst for a correction in the cryptocurrency market, JPMorgan said.
The news rattled investors with large long positions. The report added that the SEC is appealing the district court’s ruling in the Ripple case.
The outcome of the appeal is not expected until next year, potentially sparking a new wave of legal uncertainty in the crypto market.