Bitcoin Facing Challenges as Institutional Interest Declines
Bitcoin’s price rally is facing potential threats as it struggles to break above the $100,000 mark. Analysts at JPMorgan have noted a significant decline in institutional interest in the cryptocurrency market, particularly in Bitcoin and Ethereum futures contracts.
Institutional Demand Declines, Futures Market Shows Weakness
Institutional investors have played a crucial role in driving Bitcoin’s price higher over the past year, helping it surpass key milestones. However, the recent inability of Bitcoin to sustain its upward momentum beyond $100,000 indicates a slowdown in institutional investments.
JPMorgan’s analysis confirms this slowdown, highlighting a decline in Bitcoin and Ethereum futures markets on the Chicago Mercantile Exchange (CME). The trend of backwardation, where spot prices exceed futures prices, suggests hesitancy among institutional players due to a lack of immediate bullish catalysts.
“This is a negative development and indicative of demand weakness,” stated JPMorgan analyst Nikolaos Panigirtzoglou. “Lower demand from systematic and momentum-driven funds, such as CTAs, has also impacted bitcoin and ether futures.”
The lack of bullish catalysts, coupled with uncertainties surrounding regulatory reforms, has kept the market stagnant, leading to continued profit-taking.
Allegations Of Market Manipulation
There are growing concerns within the crypto community about potential market manipulation preventing Bitcoin from breaking above $100,000. Industry leaders have suggested that large market participants may be artificially suppressing prices, making sustained upward momentum difficult.
Historically, Bitcoin has experienced periods of suspected price manipulation by whales, and the influx of institutional investors has raised concerns about the possibility of such practices continuing.
As of the latest data, Bitcoin is trading at $96,180, down 2% in the past 24 hours. The current trend suggests that Bitcoin may consolidate around $100,000 in the short term, with long-term price targets varying from $150,000 to $2 million, as projected by analysts.
Featured image from Sky News, chart from TradingView