© Reuters
Investing.com – In a recent research report, analysts at JPMorgan (NYSE:) claimed that the further downside potential of the relative to its current price is limited, following a correction that caused the crypto to test 25,000 dollars.
The bank’s analysts, led by Nikolaos Panigirtzoglou, have indeed estimated that legal and regulatory news have caused a wave of sales in recent weeks that “is still reverberating”.
However, they believe that the sell-off appears to be in its final stages, based on analysis of open interest (OI) futures contracts on the Chicago Mercantile Exchange (CME), knowing that an open interest large on futures generally indicates an overly choppy market vulnerable to liquidation cascades.
“Therefore, we see limited downside for cryptocurrency markets in the near term,” the analysts wrote.
JPMorgan also said crypto investors are currently awaiting a decision on a spot bitcoin ETF and preparing for a Securities and Exchange Commission (SEC) lawsuit appeal against the payments company.
Recall that the SEC sued Ripple at the end of 2020 accusing it of selling XRP as an unregistered security, and only obtained a partial victory last month. However, JPM believes that the anticipation of the call from the SEC has induced a “new cycle of legal uncertainty” for the crypto markets and makes them sensitive to other developments.