JPMorgan (JPM) said there are increasing signs that the recent crypto market selloff may be nearing a bottom, with flow and positioning metrics showing stabilization following massive de-risking late last year.
Analysts led by Nikolaos Panigirtzoglou said: “Signs of January bottoming can also be seen in other crypto indicators in perpetual futures and in CME futures position proxies.”
Bitcoin BTC$90,366.40 and ether Ethereum$3,090.81 The bank said in a report on Wednesday that exchange-traded funds (ETFs) saw significant outflows in December, despite record $235 billion in inflows into global equity ETFs. The divergence highlighted how rapidly investors reduced their exposure to cryptocurrencies towards the end of the year.
Both BTC and ETH have fallen in recent months after strong gains early in the cycle, with Bitcoin down double digits from recent peaks and major altcoins posting even steeper declines.
The correction coincided with heightened volatility, ETF outflows and a broader cooling in risk appetite across global markets, with crypto prices remaining range-bound after a rally last year.
However, analysts noted that ETF data so far in January suggests that inflows into Bitcoin and Ether funds are starting to stabilize and selling pressure is easing.
Analysts at the bank say they are seeing similar signs of bottoming out in the perpetual futures market and position proxy trading derived from Chicago Mercantile Exchange (CME) futures, indicating that both retail and institutional investors may have largely completed the shedding of positions that accounted for much of the final quarter of 2025.
This tentative stability could be strengthened by MSCI's decision not to remove Bitcoin and crypto treasury companies from its global equity benchmarks in its February 2026 review, the report said.
While MSCI has signaled a broader review of its methodology in the future, analysts said the decision provides short-term relief, particularly for strategy-related exposures, and reduces the risk of forced selling due to index movements.
The report also rejected the idea that deteriorating liquidity caused the recent correction. The bank said there was little evidence of deteriorating liquidity conditions in CME Bitcoin futures or its market breadth metric, which measures the impact of trading volume in major Bitcoin ETFs on prices. Rather, the company argued that risk aversion caused by MSCI's October announcement regarding possible index exclusion was a major factor in the economic downturn.
Overall, JPMorgan analysts concluded that January's data points to a possible bottom rather than the start of a new downside, with most of the unwinding of crypto positions now likely lagging behind the market.
read more: Asset management company Bitwise sees three challenges for the rise of cryptocurrencies in 2026.
