Liquidity in the bitcoin market should recover quickly after the futures-driven price crash, JPMorgan says

Liquidity in the bitcoin market should recover quickly after the futures-driven price crash, JPMorgan says

Liquidity in the cryptocurrency market should recover rapidly after bitcoin's recent tumble, which was worsened by a sell-off in futures contracts, according to analysts at JPMorgan.

The volume of activity on bitcoin exchanges is generally proving more resilient and quicker to recover as time goes on, the analysts, led by Joshua Younger, said. The note was published Wednesday and seen by Insider on Monday.

They added that traders' buying of futures contracts appeared to have picked up sharply again after the bitcoin price fell dramatically on April 18, and that bitcoin mining rates had also recovered after a recent drop.

Bitcoin started to slide on Friday, April 16 and continued to fall across the week to below $50,000 from a high of more than $64,000 touched a week earlier.

However, bitcoin picked up on Monday, rising roughly 4% to trade at around $52,600.

Analysts said a number of factors seemed to have triggered the recent drop, including general fatigue and profit-taking after a rapid rally during Coinbase's listing on the stock market; a sharp drop in mining rates around the world; and a ban on cryptocurrency payments in Turkey.

JPMorgan's note said bitcoin derivatives, such as futures, were likely a key accelerant. Futures are contracts to