JPMorgan warns of bitcoin weakness as futures get liquidated

The last few times Nikolaos Panigirtzoglou witnessed such negative price action in Bitcoin, buyers returned in time to prevent deeper slumps. This time, the JPMorgan Chase and Co. strategist is worried.

If the largest cryptocurrency isn't able to break back above $60,000 soon, momentum signals will collapse, strategists led by Panigirtzoglou wrote in a note Tuesday. Its likely traders including Commodity Trading Advisers (CTAs) and crypto funds were at least partly behind the build-up of long bitcoin futures in recent weeks, as well as the unwind in past days, they said.

"Over the past few days bitcoin futures markets experienced a steep liquidation in a similar fashion to the middle of last February, middle of last January or the end of last November," the strategists said. "Momentum signals will naturally decay from here for several months, given their still elevated level." (Bloomberg)