JPMorgan has recently stated that when analyzed, the Bitcoin (BTC) futures curve appears to have been in constant backwardation for the majority of 2018, which was the year during which the flagship cryptocurrency had lost nearly 75% of its overall value. As such, the company believes that the difference between BTC futures prices and BTC spot prices, when observed and analyzed thoroughly, could be seen as a key signal for a potentially bearish market.
As of the time of this writing, BTC is trading at $38,008, which is a 0.2% decrease within the past hour, a 9.9% increase since yesterday, and a 0.8% increase within the past week. The current market capitalization of Bitcoin is $711,952,886,968.
Spot price above future prices
The analysts at JPMorgan had stated via a note on Thursday that the BTC market has indeed returned to a state of backwardation. This means that we are currently in a situation where the spot price is seen to be above future prices. The team of analysts had been spearheaded by Nikolaos Panigirtzoglou, a well-known global market strategist.
According to the team, the aforementioned backwardation is indeed a negative and harmful sign as far as the price for Bitcoin is concerned. Despite the fact that a rebound of relatively major proportions had occurred over the previous couple of days, where BTC had managed to hit $37,500, the analysts nevertheless highlighted the importance of the BTC futures curve. The team claims that the imminent return to this kind of backwardation as of late is undoubtedly indicative of a bearish market and that we can draw many similarities between the current situation and what had transpired back in 2018.
BTC’s dominance in jeopardy?
The abovementioned team had also realized another interesting development, as it had been observed that BTC’s current weakened share within the overall cryptocurrency market value is also something that is a cause for alarm. As of right now, BTC’s share within the cumulative cryptocurrency market cap is 43%, which accounts for just about $682 billion from the overall value of $1.6 trillion.
This is primarily due to the fact that the supremacy exhibited by BTC is in danger of decreasing, as this very dominance had dipped to 40% on the crypto markets towards the end of last month. This is indicative of the lowest share ever observed within the previous three years.