Crypto Price Alert: JPMorgan Issues Stark Bitcoin Warning As Ethereum, Binance’s BNB, Cardano And Dogecoin Slide
Bitcoin and cryptocurrency prices have struggled over the last month, with around $1 trillion wiped from the value of the combined crypto market since it peaked at around $2.5 trillion in mid-May.
The bitcoin price fell to just over $30,000 per bitcoin this week before rebounding thanks to El Salvador's plans to adopt bitcoin as its official currency alongside the U.S. dollar. Elsewhere, other top five cryptocurrencies by value—ethereum, Binance's BNB, cardano, and dogecoin—have also lost ground, each falling between 5% and 10% this week.
Now, despite the bitcoin price bouncing back towards $40,000 over the last couple of days, analysts at Wall Street giant JPMorgan have warned the "backwardation" over recent weeks points to a coming "bear market."
"We believe that the return to backwardation in recent weeks has been a negative signal pointing to a bear market," JPMorgan strategists led by Nikolaos Panigirtzoglou wrote in a note that was first reported by financial newswire Bloomberg, warning bitcoin price crash from over $50,000 per bitcoin in May is an "unusual development and a reflection of how weak bitcoin demand is at the moment from institutional investors."
The analysts pointed to weakness in the bitcoin futures market they say echos the 2018 bear market that was branded crypto winter for its devastating effect on cryptocurrencies acorss the board.
The bitcoin and crypto price boom over recent months that's seen the likes of ethereum, cardano, Binance's BNB and even "joke" bitcoin rival dogecoin, surge many thousands of percent has been driven by a combination of long-awaited institutional adoption and retail investor fear-of-missing-out (FOMO).
As traders and investors piled into these so-called "altcoins," bitcoin's crypto market dominance—a measure of how weighted the overall cryptocurrency market is toward bitcoin—has fallen to just over 40%, down from around 70% at the beginning of the year.
Bitcoin's dominance may need to return to over 50% before the bull market returns, according to JPMorgan's analysis. Bitcoin's dominance dipped under the 50% in late April for the first time since July 2018, according to crypto price data from CoinMarketCap.