Is the Crypto Market Correction Finally Running Out of Steam? JPMorgan Chase Weighs In

According to a recent analysis from JPMorgan Chase, the ongoing downturn affecting digital assets appears to be losing momentum. As reported by CoinDesk on January 8th, the banking giant’s research team, led by analyst Nikolaos Panigirtzoglou, has identified several stabilization signals across crypto markets.

ETF Flows Show Signs of Stabilization

The most telling indicator comes from Bitcoin and Ethereum exchange-traded fund data. Capital departures from these investment vehicles, which had been a concern through late 2024, began to stabilize as January arrived. This shift suggests that the panic selling phase may have already passed its peak, with investors completing their portfolio adjustments.

Positioning Metrics Signal Completion of De-Risking

Beyond ETF movements, futures market indicators paint a similar picture. According to JPMorgan Chase’s analysis, trader positioning data suggests that the majority of risk reduction activities have concluded by the end of 2025. This typically precedes market recovery phases, as forced liquidations and defensive repositioning wind down.

Liquidity Remains Robust

Contrary to fears of a market seized by illiquidity, JPMorgan Chase notes that trading conditions remain healthy. The banking institution attributes the sell-off not to structural market stress, but rather to MSCI’s October announcement regarding potential exclusion of cryptocurrency-related companies from indices—triggering systematic de-risking by index-tracking investors.

Recent Regulatory Clarity Removes Overhang

The turning point may have arrived with MSCI’s recent decision to maintain crypto-related companies in its February 2026 global equity index review. This announcement eliminates the specter of forced selling that would have accompanied potential index removal, effectively removing a key headwind from the market.

JPMorgan Chase’s assessment suggests that with de-risking largely complete and immediate regulatory threats subsiding, market conditions may stabilize in the near term.