JPMorgan says deleveraging in May and June was the most intense since 2018, but that’s getting behind the crypto ecosystem amid increased retail demand.
JPMorgan analysts are saying positivity among retail investors is on the upward trajectory, with an improved market outlook coming on the back of huge turbulence and uncertainty.
The bank giant notes in a report CoinDesk, Thursday’s cited source, said that the improvement is due to the diminution of the intense deleveraging that characterized the market crash in June and May as well the months that followed the 2021 bull.
According to JPMorgan analysts, “the extreme phase of backwardation” witnessed in the market over the last two months was the worst since 2018. This extreme pain appears to be diminishing with the sharp rises in crypto prices over the last few days.
Bitcoin (BTC), which jumped to $24,000, reached its highest level in more than a month. Glassnode on-chain data showed that the number of wallets in losses (7 day moving average) dropped to a low of 30 days.
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Retail demand jumps amid Ethereum “Merge” news
While Bitcoin’s upside was remarkable, the main avenue of positivity was around Ethereum (ETH), the bank said.
Investor expectations are high after last week’s announcement that Ethereum’s long anticipated “Merge” would be hitting mainnet in September. The buying pressure around the excitement for cryptocurrency’s largest smart contracts platform also seeped into the rest of the market, with ETH/USD jumping above $1,500 as the overall crypto market cap crossed above $1 trillion.
The number of Ethereum addresses in profit (7-day moving average) has also increased. reached A one-month high.
Notably, the bounce in crypto prices isn’t reflected in crypto funds or futures market, which the bank says is indicative of demand being retail-driven.
Further evidence of retail demand is seen in the increase in the number of “smaller wallets” holding BTC or ETH, JPMorgan added