Strategists at JPMorgan believe the recent cryptocurrency market selloff may be approaching its final phase.
In a research note released on January 8, 2026, the bank’s analysts pointed to a clear slowdown in selling pressure, particularly from spot Bitcoin ETFs, as a key signal that downside momentum is fading.
The analysis was led by Nikolaos Panigirtzoglou and focuses on structural shifts in market flows rather than short-term price action.
ETF Outflows Are Losing Momentum
According to JPMorgan, the most important development is the significant easing of net outflows from spot Bitcoin ETFs. Large redemptions, especially from the Grayscale Bitcoin Trust (GBTC), had been a persistent source of sell-side pressure since ETF approvals.
Recent data, however, shows that these outflows have slowed materially. JPMorgan views this as a critical inflection point, as ETF-related selling had amplified downside moves across the broader crypto market. With that pressure diminishing, the market environment appears less hostile than in previous weeks.
Selling Pressure From Venture Capital Is Also Fading
The research note highlights a second stabilizing factor: a pause in crypto-related fundraising and liquidations.
While 2025 saw substantial capital raises by venture funds and crypto-native firms, JPMorgan notes that new fundraising activity has largely stalled amid the market downturn. Importantly, the strategists see no evidence of fresh, large-scale liquidations from distressed or “zombie” crypto projects and venture funds.
This matters because forced selling from these entities has historically contributed to sharp drawdowns. The absence of new liquidation waves suggests that much of the excess leverage has already been flushed from the system.
Why a Market Bottom May Be Forming
JPMorgan argues that market bottoms tend to form not when buyers aggressively return, but when sellers are exhausted. With ETF outflows easing and venture-driven selling largely complete, the pool of natural sellers appears to be shrinking.
In the note, the strategists wrote that the period of cascading liquidations—triggered initially by the approval of spot Bitcoin ETFs—is likely nearing its end. As a result, the overall backdrop for crypto markets is becoming less negative.
What This Means for Crypto Markets
While JPMorgan does not call for an immediate rebound, the bank suggests that conditions are aligning for stabilization, which is typically a prerequisite for any sustained recovery. If selling pressure continues to fade, prices may begin to find a durable floor before the next directional move emerges.
For now, JPMorgan’s assessment points to a market that is transitioning away from forced selling and toward a more balanced supply-demand environment, often the first step in the formation of a cycle bottom.
