JPMorgan sees Bitcoin futures oversold as investors rotate into gold and silver

Analysts at JPMorgan believe there is a high likelihood that Bitcoin futures are oversold, while precious metal futures such as silver and gold are overbought. This difference is noted at a time when several investors in both retail and institutional markets show heightened interest in these precious metals compared to cryptocurrency.

Reports explained that retail investors actively participated in debasement trade, an investment strategy of shifting capital away from fiat currencies and government bonds into “hard assets” like gold or Bitcoin for the majority of 2025.

However, after several considerations, this trend, according to a report from JPMorgan analysts led by managing director Nikolaos Panigirtzoglou, dropped around August of last year when officials noticed that the Bitcoin ETF’s global investment growth slowed down and later decreased in the fourth quarter.

Retail investors demonstrated heightened interest in precious metals 

While global investment in Bitcoin ETFs decreased, gold ETFs’ investments surged sharply, closing the year with total inflows approaching $60 billion. Reports noted that a large portion of the funds flowing into silver ETFs also originated in the last quarter of 2025, which aligns with bitcoin ETFs’ outflows. 

Such a scenario suggests that several retail investors have begun focusing on precious metals, thereby reallocating their money away from bitcoin. 

Following this allegation, analysts conducted research and found that institutional behavior strongly supported this trend. To support this claim, their institutional futures positioning measure, based on amendments to CME futures open interest, shows a major increase in silver’s long positions, particularly in the last quarter of 2025 and into early 2026. 

This move was largely fueled by hedge funds. Meanwhile, similar to silver, gold futures rose across most of the previous year. Bitcoin futures, on the other hand, show an increase that did not correspond to that observed in gold and silver futures in the same timeframe.

At this point, Momentum indicators, which analysts use to measure trend-following traders such as commodity trading advisers, reveal a significant difference among the three assets.

Analysts remain optimistic about gold’s fate in the market 

Analysts dug deeper into the current market situation and concluded that gold futures are overbought, silver futures are extremely overbought, and Bitcoin futures are oversold. 

With this finding in mind, they pointed out that there is a high likelihood of short-term profit-taking in gold and silver, or that prices would return to historical averages. Since this statement was made public, reports highlighted that both gold and silver dropped from their recent highs.

In the meantime, another issue raised was the differences in liquidity among the three assets. To arrive at this finding, analysts used the Hui-Heubel ratio, an indicator of market depth: a lower ratio indicates greater liquidity (more volume with less price volatility). In comparison, a higher ratio signals a more fragile market. 

According to their analysis, gold consistently showed a lower ratio, indicating that the precious metal has greater liquidity and broader market participation.

Contrastingly, silver showed a higher ratio, suggesting thinner liquidity. This situation prompted the analysts to believe that the asset’s recent decline in market breadth might have accelerated price fluctuations. 

At this point, they confirmed that, among the three assets, silver has the highest Hui-Heubel ratio, indicating lower market depth and greater sensitivity to minor order flows. Given current market conditions, analysts maintain a long-term bullish outlook for gold despite short-term threats to the precious metal.

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