JPMorgan confirms bottom signal: ETF outflows slow down, the crypto market sell-off may have come to an end

The current correction in the cryptocurrency market may really be coming to an end. JPMorgan’s latest report indicates that the outflows from Bitcoin and Ethereum ETFs have begun to stabilize since January, and futures market positioning indicators also show that the de-risking behavior by investors toward the end of 2025 has basically been completed. This is not an official statement but based on concrete market data. More importantly, MSCI recently decided not to exclude cryptocurrency-related companies in its February 2026 global equity index review, directly removing a significant forced selling risk.

Three Supporting Points for Bottom Signal

ETF outflows slowing down is a key indicator

JPMorgan analyst Nikolaos Panigirtzoglou pointed out that the stabilization of ETF fund outflows is an important signal. In crypto assets, institutional buying and selling through ETFs often represent the overall market sentiment. When outflows slow or stop, it indicates that the panic selling by institutions has basically been completed. This does not mean the bottom has been fully confirmed, but that the selling momentum is waning.

Futures positioning shows de-risking is complete

Futures market positioning indicators are important tools for measuring investor sentiment. JPMorgan’s data shows that the wave of concentrated de-risking by investors toward the end of 2025 has been completed. This means that the passive stop-loss sell-offs have largely been cleared, and the market is unlikely to experience large-scale technical sell-offs again.

MSCI’s decision eliminates forced selling risk

This point is often overlooked but is actually crucial. MSCI indicated last October that it might exclude crypto-related companies, which triggered a de-risking sell-off. Now, MSCI has decided not to proceed with this, directly removing a “Damocles sword” hanging over the market. This provides short-term relief and reduces the risk of forced selling related to index changes.

Institutional Layout Validates Market Bottom Judgment

If we only look at JPMorgan’s report, some may remain skeptical. But looking at the actions of other institutions makes it clear.

These are not minor moves. Morgan Stanley, as one of the world’s top three investment banks, launching a Bitcoin ETF is itself a strong bullish signal. JPMorgan deploying JPMD on the Canton network is further laying the groundwork for future large-scale institutional use. All these happen during the market correction, indicating that institutions do not believe the bottom is far away.

Deep Implication of Good Market Liquidity

JPMorgan emphasizes that “market liquidity remains good,” which may seem like a routine statement but is actually very important. Good liquidity means:

• Large transactions won’t cause violent swings
• The market hasn’t experienced extreme panic
• Institutions can deploy assets with confidence, without worrying about slippage

This contrasts sharply with liquidity crunches at extreme bottoms (such as late 2018 or late 2022). The current correction appears more like rational de-risking rather than panic selling.

Optimistic Outlook for 2026 Echoes Current Bottom Signals

According to related information, institutions are generally optimistic about prices in 2026. Standard Chartered has revised its 2026 target to $150,000, JPMorgan estimates it could challenge $170,000, and Fundstrat even predicts $200,000–$250,000. These forecasts are not baseless but based on judgments about structural market changes.

If institutions truly believed the bottom was still far off, they wouldn’t be actively positioning themselves this way. Conversely, the current bottom signals, combined with these optimistic expectations, form a closed loop: the bottom is near, and the upside potential is considerable.

Risks to Watch

However, it should be noted that JPMorgan’s statement that “selling may be close to the bottom” does not mean the bottom has been confirmed. Words like “may” and “close” are cautious. True bottom confirmation requires more time and data validation. Future points to monitor include:

• Whether ETF flows truly stabilize or start net inflows
• Whether technicals can effectively break through key resistance levels
• Whether new black swan events emerge

Summary

JPMorgan’s report provides an important reference signal: the selling momentum in the market is waning, and the bottom may not be far off. The slowdown in ETF outflows, improved futures positioning, and the removal of MSCI risk form a relatively complete framework for bottom detection. Coupled with actual institutional deployments by Morgan Stanley, JPMorgan, and others, and their optimistic outlook for 2026, all point in the same direction: the correction may be coming to an end.

But this is not a buy signal; rather, it is a signal to be observed continuously. True confirmation still requires time. For investors, it is crucial to understand the implications of these signals rather than rushing to buy the dip. The bottom is rarely confirmed in a single moment but becomes clearer through the gradual validation of multiple signals.