SKN | JPMorgan Sees Signs Crypto Selloff Is Nearing a Bottom as ETF Outflows Moderate

JPMorgan analysts say the recent crypto market selloff may be approaching a potential inflection point, citing a noticeable slowdown in ETF outflows and improving market structure indicators. The assessment comes as digital assets remain under pressure from tight global financial conditions, while investors closely watch signals of stabilization following weeks of heightened volatility.

The bank’s view adds a cautiously constructive note to a market still shaped by macro uncertainty, regulatory scrutiny, and shifting institutional positioning.

Market Reaction: Selling Pressure Shows Early Signs of Fatigue

According to JPMorgan, cumulative outflows from major Bitcoin spot ETFs have begun to ease after several weeks of sustained withdrawals. Daily net outflows, which previously reached peaks of more than $500 million on heavy selling days, have moderated toward the $100–$150 million range, suggesting that forced selling pressure is abating.

In price terms, Bitcoin has stabilized near recent lows after falling roughly 15%–18% from its short-term peak, while Ethereum has shown similar consolidation following a drawdown of about 17%. Trading volumes across major centralized exchanges declined by nearly 20% week-on-week, a pattern often associated with sellers becoming exhausted.

ETF Flows: Institutional Positioning Begins to Normalize

JPMorgan highlighted that ETF flow dynamics remain a critical transmission channel between traditional finance and crypto markets. The moderation in outflows suggests that institutional investors may be moving from outright risk reduction toward more neutral positioning.

While inflows have not yet returned consistently, analysts noted that the pace of redemptions has slowed enough to reduce mechanical selling of underlying assets. This shift can help dampen volatility, particularly in Bitcoin, which has increasingly traded in line with broader macro-driven risk assets such as technology equities.

Investor Sentiment: From Capitulation to Caution

From a behavioral standpoint, JPMorgan’s analysis points to a transition from capitulation toward cautious reassessment. Funding rates across perpetual futures have moved closer to neutral, indicating that leveraged bearish positioning is no longer accelerating.

At the same time, options markets show implied volatility stabilizing after recent spikes, suggesting that traders are pricing in less extreme downside scenarios. For long-term allocators, this environment often marks a phase where downside risks remain, but the probability of sharp, disorderly moves begins to decline.

Macro and Regulatory Backdrop: Still a Key Variable

Despite improving technical signals, JPMorgan cautioned that broader macro conditions remain decisive. Sticky inflation, uncertain interest rate trajectories, and ongoing regulatory developments continue to limit aggressive risk-taking in digital assets.

Crypto markets, the bank noted, are unlikely to decouple meaningfully from global liquidity trends in the near term, making upcoming economic data and central bank guidance critical for directional conviction.

Looking ahead, JPMorgan sees the easing of ETF outflows as an important early indicator rather than a definitive turning point. Investors will be watching closely for sustained flow stabilization, renewed spot demand, and confirmation from on-chain and derivatives data to assess whether the market can transition from consolidation toward a more durable recovery.