Crypto Market Shows Signs of Weak Demand, Analysts Highlight Need for Political Catalysts
Recent analysis indicates a downturn in institutional demand within the cryptocurrency market, suggesting anticipated initiatives from Trump's administration could provide much-needed support later this year.
Cryptocurrency Market Overview
The cryptocurrency market is facing a lack of positive catalysts currently, according to a recent report by JPMorgan. The report highlights that the downward trend in the market is accompanied by both Bitcoin (BTC) and Ether (ETH) futures moving towards a state called backwardation, which indicates a decrease in demand. Additionally, this state occurs when the spot price of an asset surpasses its futures price.
Key Points:
- Current market conditions show weak demand for cryptocurrencies, particularly reflected in CME futures positioning.
- Analysts, led by Nikolaos Panigirtzoglou, characterized this trend as negative for institutional investors using these futures contracts.
- The report suggests that positive initiatives from the new U.S. administration under Trump are unlikely to materialize until the latter half of the year. This could lead to increased profit-taking among investors, resulting from absent short-term catalysts.
Expectations
Lower interest in trading from systematic and momentum-driven funds may also contribute to this weakening in demand for Bitcoin and Ether futures. The awaited initiatives from the administration are seen as potential solutions to revitalize market interest.
For further insights, read more about the potential impacts on the market in the wider context of cryptocurrency futures trading.
