JPMorgan said the recent crypto market selloff may be approaching a bottom, pointing to flow and positioning data that show signs of stabilization after aggressive de-risking late last year. In a report published Wednesday, the bank said several indicators now suggest the worst of the unwind may already be behind the market.
Analysts led by Nikolaos Panigirtzoglou wrote that January has shown early bottoming signals not only in spot fund flows, but also in perpetual futures and in the bank’s positioning proxies based on Chicago Mercantile Exchange (CME) futures. That reading suggests both retail and institutional investors may have already completed most of the position cuts that defined the fourth quarter of 2025.
December showed a sharp split in fund flows
The bank said bitcoin and ether ETFs posted notable outflows in December, while global equity ETFs drew a record $235 billion in inflows over the same period. The contrast highlighted how quickly investors reduced crypto exposure into year-end.
Bitcoin and ether had both posted strong gains earlier in the cycle, but prices weakened over recent months. Bitcoin is down by double digits from its recent peak, and major altcoins have fallen even more. The correction came with heavier volatility, ETF outflows and softer risk appetite across global markets, leaving crypto prices trapped in a range after last year’s rally.
January ETF data points to easing selling pressure
JPMorgan said January ETF data now indicates that selling pressure is easing, with flows into bitcoin and ether funds beginning to stabilize. The bank also sees similar patterns in perpetual futures and in CME-derived positioning proxies, suggesting the prior wave of deleveraging and exposure cuts is losing force. The message is simple: selling has not kept accelerating.
The report added that MSCI’s decision not to exclude bitcoin and crypto treasury companies from its global equity benchmarks in the February 2026 review could support that tentative stabilization. While MSCI has said it may revisit its methodology more broadly in the future, JPMorgan said the latest decision offers near-term relief, particularly for Strategy-linked exposure, and lowers the risk of forced selling tied to index changes.
Bank rejects liquidity deterioration as the main driver
JPMorgan also pushed back on the view that worsening liquidity caused the recent correction. According to the bank, its market breadth metrics, including measures of the price impact of trading volumes in CME bitcoin futures and major bitcoin ETFs, show little evidence that liquidity conditions materially deteriorated during the decline.
Instead, the bank argued that de-risking was the main catalyst. It pointed to MSCI’s October announcement last year regarding possible index exclusions as the event that set off the downturn. Looking across January’s flow and positioning data, JPMorgan said most of the crypto position unwind now appears to be over, and current conditions look more like a bottoming phase than the start of another sharp leg lower.