JPMorgan Sees Crypto Sell-Off Losing Momentum

What changed most / what to expect: JPMorgan’s key takeaway is a shift from heavy selling pressure to early signs of stabilization across crypto ETFs and derivatives markets in January 2026. This indicates that the significant position reductions by both retail and institutional investors, which characterized the final quarter of 2025, are likely concluding. Investors can expect a more stable, albeit potentially sideways, market in the near term, rather than a new leg lower.

JPMorgan’s analysis, led by Nikolaos Panigirtzoglou, pinpoints several crucial indicators suggesting a turning point in the crypto market correction. These insights offer a fresh perspective on the underlying dynamics influencing Bitcoin and Ethereum.

Key highlights:

• Crypto market correction losing momentum in January 2026.
• Early signs of stabilization in Bitcoin and Ethereum ETFs.
• Perpetual futures and CME futures positioning proxies show bottoming.
• MSCI decision not to exclude Bitcoin/crypto treasury companies from global equity benchmarks provides relief.
• Liquidity conditions did not deteriorate; de-risking was primary catalyst.

Highlights:

• December 2025: Notable outflows from Bitcoin and Ethereum ETFs.
• December 2025: Global equity ETFs attracted a record $235 billion of inflows.
• January 2026: ETF data suggests easing selling pressure.
• October 2025: MSCI’s announcement around potential index exclusions triggered de-risking.

✓ Pros:

• JPMorgan identifies concrete signs of market stabilization, offering a data-backed optimistic outlook.
• The MSCI decision to retain crypto treasury companies in its global equity benchmarks removes a significant risk of forced selling.
• The report refutes claims of deteriorating liquidity, suggesting the market’s underlying health is not severely compromised.

✗ Cons:

• Despite stabilization, Bitcoin and major altcoins have seen double-digit declines from recent peaks, indicating a challenging environment.
• The market experienced heavy volatility and broader cooling in risk appetite, which could persist.
• While the “bulk” of de-risking is over, it doesn’t preclude further price fluctuations or a slower recovery.

JPMorgan’s assessment stands in contrast to the prevailing sentiment of continued bearish pressure that dominated the end of 2025. While many feared a prolonged crypto winter, the bank’s analysis suggests a more nuanced reality where the worst of the “de-risking” phase, largely triggered by MSCI’s October announcement regarding potential index exclusions, has passed. This provides a more optimistic outlook than a straightforward continuation of the downtrend, aligning with a potential “tactical rotation” rather than forced liquidation.

While direct “user feedback” on a bank’s analysis is not readily available in the traditional sense, the market’s reaction to such reports often reflects investor sentiment. News of stabilization from a major financial institution like JPMorgan can instill a degree of cautious optimism among both retail and institutional investors. The removal of the MSCI exclusion threat, in particular, was seen as a significant relief, potentially preventing billions in forced selling and lifting an “overhang” on related firms. However, the memory of December’s outflows and overall market volatility likely keeps many investors in a state of watchful waiting.

JPMorgan’s analysis offers a compelling case that the crypto market’s recent correction is losing steam, with January 2026 showing early signs of stabilization. I find their argument persuasive, particularly given the detailed examination of ETF flows and derivatives positioning. The MSCI decision is a genuine relief and removes a key systemic risk. However, investors should remain aware that “stabilization” doesn’t equate to an immediate bull run; rather, it suggests a foundation for potential recovery or consolidation.