JPMorgan analysts project that Bitcoin could climb to approximately $170,000 over the next six to 12 months based on improving volatility dynamics against gold. The bank's managing director Nikolaos Panigirtzoglou released the analysis on Wednesday.
Market Corrections and Liquidations
The cryptocurrency market corrected nearly 20% from recent peaks, with Oct. 10 marking the steepest drop. That session recorded the largest perpetual futures liquidation event in crypto history, with additional liquidations hitting markets on Nov. 3.
The Nov. 3 decline coincided with a $120 million Balancer exploit in the decentralized finance sector. The security breach intensified concerns about DeFi protocol vulnerabilities across the industry.
Deleveraging Phase and Market Gauges
JPMorgan's team determined that the deleveraging phase in perpetual futures has concluded. Open interest ratios in Bitcoin perpetual futures versus market capitalization normalized to historical levels within weeks of the October liquidations.
Ethereum markets showed similar deleveraging patterns, though less pronounced than Bitcoin. CME futures data revealed the opposite trend, with Ethereum experiencing heavier liquidations than Bitcoin during the same period.
Exchange-traded fund redemptions stayed modest relative to early October inflows. The analysts identified perpetual futures as the critical instrument for gauging market conditions, with recent stabilization signaling that the deleveraging cycle has ended.
Bitcoin's Appeal and Price Projection
Gold's rising volatility enhanced Bitcoin's risk-adjusted appeal for investors. The Bitcoin-to-gold volatility ratio dropped below 2.0, meaning Bitcoin currently requires about 1.8 times more risk capital than gold.
Bitcoin's $2.1 trillion market capitalization would need a 67% increase to match gold's approximately $6.2 trillion in private-sector investment through ETFs and physical holdings. This calculation produces the theoretical $170,000 price projection.
JPMorgan stated Bitcoin is trading roughly $68,000 below its volatility-adjusted fair value relative to gold. Bitcoin currently trades near $103,000, up 0.2% over 24 hours. The bank projected $165,000 by year-end in October and estimated $126,000 in August. Bitcoin reached an all-time high above $126,200 on Oct. 6 before the record liquidation event four days later.