JPMorgan says crypto market correction appears driven by retail selling of bitcoin and ether ETFs

JPMorgan analysts suggest the current crypto market correction, which saw Bitcoin drop below their estimated support level of $94,000, is primarily caused by non-crypto native investors, specifically retail investors utilizing spot Bitcoin and Ethereum ETFs. This contrasts with the October correction, which was driven by crypto-native traders deleveraging perpetual futures. So far this month, approximately $4 billion has been withdrawn from spot BTC and ETH ETFs, surpassing February's record outflows. The analysts note that this selling is isolated to crypto ETFs, as retail investors are simultaneously pouring about $96 billion into equity ETFs this month, indicating they treat crypto and equities as separate risk asset categories. Therefore, JPMorgan concludes that the crypto ETF selling should not be interpreted as a broader bearish signal across all risk assets, especially equities, and the long-term correlation between crypto and equities remains intact.

(Source：The Block)