JPMorgan analysts, led by managing director Nikolaos Panigirtzoglou, have identified early signs of stabilization in the cryptocurrency market following the year-end sell-off. The bank's report, published on January 8, 2026, attributes the positive shift to easing outflows from Bitcoin and Ethereum exchange-traded funds (ETFs) and a normalization in derivatives positioning.
The key driver of the late-2025 downturn was identified as investor de-risking, not a liquidity crisis. JPMorgan analysts specifically pointed to the October 10, 2025, announcement by MSCI regarding the potential exclusion of MicroStrategy from its indexes as the trigger for this positioning adjustment. December saw significant redemptions from BTC and ETH ETFs, contrasting sharply with record monthly inflows of $235 billion into global equity ETFs.
However, early January data indicates a shift. ETF flow trackers for Bitcoin and Ethereum are showing initial signs of "bottoming out." Concurrently, positioning indicators in perpetual futures markets and CME Bitcoin futures suggest selling pressure is abating. The report notes that open interest has stopped expanding on price dips, and hedge sizing has decreased, signaling that the bulk of profit-taking and forced supply risk has likely passed.
A critical factor providing "at least temporary relief" was MSCI's recent decision to keep digital-asset treasury firms, including MicroStrategy, within its global equity benchmarks for its February 2026 review. This move removed a near-term trigger for automatic selling in equities linked to Bitcoin treasuries, tempering the threat of passive outflows.
JPMorgan also examined market microstructure, finding little evidence that worsening liquidity conditions drove the correction. Metrics analyzing the price impact per unit of volume in CME bitcoin futures and major BTC ETFs did not show an abnormal rise, indicating healthy order-book depth was maintained throughout the sell-off.
The bank concludes that the market is building a "tradeable base." For the stabilization to hold and potentially lead to a recovery, JPMorgan highlights that ETF creations need to turn positive for several sessions and perpetual funding rates must remain near neutral. The report suggests priority for traders should now shift to tail-risk control around event dates and monitoring the balance between ETF inflows and spot selling by corporate treasuries.
