JPMorgan Chase & Co. has recently revealed that they see signals of the coming bear market in Bitcoin as backwardation is there in the future market where the prices of the futures market will be less than that of the spot market. The recent spike in the price of Bitcoin has yet to banish the doubts regarding its susceptibility following a retreat in the month of May.
It has been witnessed that the flagship cryptocurrency has surged around 14% in just a matter of two days. As a result of this, the bulls are relieved due to the increased momentum in the asset, but JPMorgan has mentioned backwardation in a segment of the futures market.
Nikolaos Panigirtzoglou, the leader of the strategists’ team of JPMorgan, mentioned in a note:
In addition to this, it was revealed in the note that the comparably weakened share of Bitcoin of the total market value is another concerning trend.
As far as the base of the analysis conducted by JPMorgan is concerned, the 21-day rolling average of the second Bitcoin futures has been taken into notice.
In accordance with the report, Backwardation is:
At present, Bitcoin is standing at an overall crypto share of 42%, which was around 70% at the beginning of this year. This, if some analysts are to be believed, is a result of the growing interest of the retail investors towards altcoins in the market.
Chris Weston, the Head of Research with Pepperstone Finacial Pty, has recently written in a note on Thursday: