JPMorgan: Reasons for the Decline of Bitcoin and Ethereum in November

The cryptocurrency market in November experienced a significant loss of value that caught the attention of investors. The price of Bitcoin dropped by 17%, while the price of Ethereum fell by 22%, bringing the total market capitalization down to 3 trillion dollars. During this period, an increase in volatility and intensified selling pressure were observed.

A recent report published by JPMorgan revealed that the market weakened in November, with spot and derivative volumes declining by approximately 20%. Notably, the decline in stablecoins caught attention; in this context, the average daily transaction volume of stablecoins decreased by 26%. The DeFi and NFT markets also followed a similar trend, indicating a loss of trading appetite across the market.

The report emphasized that the outflow of large funds from crypto ETPs traded in the U.S. negatively impacted the market's liquidity. A net outflow of 3.4 billion dollars was recorded in Bitcoin spot ETFs and 1.4 billion dollars in Ethereum products, marking the worst month seen so far. These developments led to more significant value losses for crypto assets compared to traditional markets; while the S&P 500 remained flat, the Nasdaq 100 only experienced a 2% decline.

In November, spot trading volumes decreased by 19%, while TradingView data indicated a 23% drop. Analysts note that the current situation has adversely affected investor confidence due to high leverage levels, the potential for another crypto winter, and weaker performance compared to equities.

On the other hand, demand for crypto-focused investment products in the U.S. also rapidly declined. Outflows from spot Bitcoin ETFs erased all the inflows from October, exacerbating the situation. Crypto stocks were also affected by this decline, losing 21% of their value in November. Overall, November is recorded as a period of sharp sell-offs and a rapid erosion of trading volumes in the cryptocurrency market.

JPMorgan forecasts that the short-term outlook for the market may continue to remain under pressure. Key points for investors to monitor include market trends, trading volumes, and the overall economic situation.