Crypto Market to Rebound in August as Liquidations Cease, Says JPMorgan

The crypto market is expected to experience a rebound in August, according to a research report by JPMorgan. This comes as liquidations are anticipated to cease by the end of July, providing a much-needed respite to the market. The report also notes that the ongoing sale of Bitcoin by the German government has added to the market’s jitteriness.

(_download_image) Crypto market rebounds

The German government has been selling off its seized Bitcoin, worth around $2.1 billion, which has put pressure on the market. This, combined with the Mt. Gox creditors’ repayments, has led to a surge in selling pressure. However, JPMorgan believes that these liquidations will cease by the end of July, paving the way for a market rebound in August.

“The reduction in the estimated net flow is largely driven by the decline in bitcoin reserves across exchanges over the past month,” analysts led by Nikolaos Panigirtzoglou wrote in the report.

Despite the short-term volatility, the crypto market tends to have adequate liquidity to absorb these sell-offs and rebound fairly quickly. The spot ETFs have received fresh capital, which may slow down the price drop. Investors in these funds may be slowing the drop in price. Since June 25, the funds have seen net inflows of $886.8 million, according to CoinGlass data.

“While such sell-offs may result in short-term volatility, the Bitcoin market tends to have adequate liquidity to absorb them and rebound fairly quickly.” - Lennix Lai, OKX Chief Commercial Officer

(_download_image) Bitcoin market tend to rebound

The rebound in August is expected to be driven by the cessation of liquidations, as well as the fresh capital inflows into spot ETFs. This could provide a much-needed boost to the market, which has been experiencing significant volatility in recent weeks.

(_download_image) Crypto ETFs to drive rebound

In conclusion, the crypto market is expected to rebound in August as liquidations cease and fresh capital inflows into spot ETFs provide a much-needed boost. Despite the short-term volatility, the market tends to have adequate liquidity to absorb these sell-offs and rebound fairly quickly.