JPMorgan Chase and Bitfinex both issued reports stating that with the end of liquidation activities and selling by short-term holders, the market is close to bottoming out and is expected to rebound in August.

JPMorgan Chase: Markets rebound in August

Citing a JPMorgan research report, CoinDesk noted that the crypto market is expected to begin rebounding in August and that liquidation activities will be completed by the end of July.

As Bitcoin reserves on major exchanges have declined over the past month, JPMorgan has also lowered its year-to-date net flow forecast for the crypto market to $8 billion from $12 billion.

The report mentioned that the decline in Bitcoin reserves may be due to Bitcoin liquidations by creditors of Gemini, bankrupt exchange Mt. Gox, or Bitcoin sales by the German government.

(Germany sells Bitcoin again! On-chain tool Arkham: Monitor how many Bitcoins each government has? A must-use tool for searching on-chain addresses, Arkham Intelligence)

Is Bitcoin Overvalued Compared to Gold?

A team of analysts at JPMorgan Chase, led by Nikolaos Panigirtzoglou, wrote in a report:

Net flows are forecast to be lower primarily due to the decline in Bitcoin reserves over the past month. And we are skeptical about the possibility that the previously expected net inflow of $12 billion will continue throughout the year, because the cost of Bitcoin production remains high relative to the price of gold.

The report highlights that the crypto market is expected to resume growth in August as liquidation activity ends.

Bitfinex: Short-term holders are done selling

Bitfinex analysts also believe the market is close to bottoming.

Citing derivatives market data, it pointed out that Bitcoin price volatility has begun to decrease as the spread between "implied volatility" and "historical volatility" has narrowed by nearly 90%, indicating that traders expect Bitcoin prices to stabilize at within the interval.

Analysts noted:

The sell-off by short-term holders may be nearing an end, we note that the short-term holders cost to profit ratio (SOPR) is 0.97, indicating that short-term holders are selling at a loss, and this has happened in the past, as the sell-off As the pressure eases, prices will rebound.

The Spent Output Profit Ratio (SOPR) is used to measure the realized profits and trends of Bitcoin. A value of SOPR greater than 1 represents a realized profit, less than 1 represents a realized loss, and equal to 1 represents a break-even. When SOPR is too low, it may indicate that the market is oversold and there is an opportunity for upside.

This article JPMorgan Chase: Bitcoin liquidation activities end this month, the market will rebound in August first appeared on Chain News ABMedia.