JP Morgan predicts a crypto market rebound in August and that the heavy liquidations from Germany, Mt Gox and Gemini will subside by the end of July.
The report suggests the slowdown of these outflows will stop impacting the market by August.
While only 30% of the top 50 altcoins are outperforming Bitcoin now, JP Morgan expects most, or about 75%, to rise with Bitcoin in August.
The altcoin season index points towards a more neutral market where both altcoins and Bitcoin can thrive at the same time.
JPMorgan recently released a report detailing its outlook on the crypto market.
In summary, the global bank believes we will see a rebound starting in August.
This comes after the bank significantly reduced its year-to-date crypto market net flow estimate from around $12 billion to $8 billion.
One of the major reasons for this reduction was the ongoing decline in Bitcoin exchange reserves between June and July. According to JP Morgan, here are all the reasons we might be seeing steady greens starting in August.
The bank’s report featured analysts led by Nikolaos Panigirtzoglou.
According to these analysts, the ongoing crypto liquidations are expected to cease sometime around the end of July, paving the way for a massive recovery in August.
This is also around the time we expect the liquidations from defunct exchanges like Mt Gox, Gemini, and even FTX to end, as well as the selling by the German government (which now has less than 10% of its initial Bitcoin stack after incessant selling).
According to JP Morgan and Nikolaos Panigirtzoglou, "The reduction in the estimated net flow is largely driven by the decline in bitcoin reserves across exchanges over the past month."
In essence, the JP Morgan analysts expect the current Bitcoin liquidators and sellers to wrap up the dumping by July, and usher in a new wave of greens, come next month.
The report also mentioned the altcoin market, as well as its correlation to the price action and movements of Bitcoin.
Interestingly, there have been several bits of speculation that altcoins typically suffer during Bitcoin seasons and vice versa.
However, there might be reason to believe that both can coexist, considering how the altcoin market typically follows Bitcoin's movements.
The altcoin season index
Moreover, the altcoin season index also shows that the market is gravitating more and more from the Bitcoin season towards neutrality and now sits at around 45%, amid a Bitcoin season reading of 25% and an altcoin season reading of 75%.
As Wise Advice highlighted in a recent tweet, only around 30% of altcoins, including Toncoin (TON), PEPE, BONK, Kaspa (KAS), Monero (XMR), and Tron (TRX), are outperforming Bitcoin, leaving the remaining 70% lagging behind.
The top 50 altcoins and their performance against Bitcoin
JP Morgan’s analysts expect the altcoin season to start with around 75% of the top 50 altcoins outperforming Bitcoin coming August 2024.
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