Despite recovering some money in a few days, JPMorgan still has concerns about bitcoin’s price. In their most recent note, they said the difference between the spot and futures markets is their biggest worry for bulls.
The price of a cryptocurrency that is a type of money has changed. It went up, then down. It went up, then down again.
After the slump, some people argue that Elon Musk, Chinese news, and over-leveraged positions caused it. But the asset has recovered some ground even though it failed to get over $40,000 again.
In the last two days, Bitcoin has increased by $6K. This is great news because it came from El Salvador. But JPMorgan Chase & Co. still has concerns about the future of Bitcoin.
The so-called backwardation in the futures market is 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.
Bitcoin futures are in a backwater. The Bitcoin futures always get less than what they should be worth. But that is not the only problem for the Bitcoin futures. This year, they were less valuable because of the bear market which made them go down more than 70%.
The strategists are worried about bitcoin’s price and think that Ethereum will do better. They have three reasons why they believe this is so.