Bitcoin could climb to $170,000 within the next six to 12 months, according to JPMorgan analysts, who say the crypto market’s leverage reset and improving volatility relative to gold point to a strong recovery ahead.
In a note led by Nikolaos Panigirtzoglou, JPMorgan said the recent 20% correction in Bitcoin – triggered by record liquidations on Oct. 10 and additional selloffs on Nov. 3 – has likely cleared excess leverage from the system. The analysts described the Oct. 10 event as “the largest deleveraging in crypto history”, followed by a smaller wave after the $120 million Balancer exploit, which rattled investor sentiment in decentralized finance.
Deleveraging Phase Nears Its End
According to JPMorgan, open interest in Bitcoin perpetual futures has fallen back to its long-term average, suggesting that speculative leverage has largely unwound. Similar trends are visible in Ethereum markets, though the analysts noted that Ethereum’s deleveraging has been less pronounced.
“In CME futures, the opposite is true; there have been more liquidations in Ethereum than in Bitcoin,” the team wrote, adding that while recent ETF redemptions weighed slightly on sentiment, they remain small compared to prior inflows.
“The message from the recent stabilization is that deleveraging in perpetual futures is likely behind us,” the analysts concluded, calling perpetual futures the key indicator for market health going forward.
Bitcoin’s Gold Paradox
The team also highlighted an improving bitcoin-to-gold volatility ratio, which has dropped below 2.0, meaning Bitcoin now consumes roughly 1.8 times more risk capital than gold. This shift, they said, makes Bitcoin more appealing on a risk-adjusted basis.
Based on this volatility relationship, JPMorgan estimated that Bitcoin’s market cap would need to rise by around 67% – from roughly $2.1 trillion to over $3.5 trillion – to match the scale of private-sector gold investment. That “mechanical exercise,” they said, implies a theoretical price near $170,000 per BTC.
The analysts added that Bitcoin is currently trading about $68,000 below its volatility-adjusted fair value versus gold, reinforcing their bullish stance.
At the time of writing, Bitcoin was trading at $103,000. JPMorgan previously made similar bullish calls, projecting a $165,000 year-end target in October and a $126,000 forecast in August – the latter reached weeks later when Bitcoin hit an all-time high of $126,200 on Oct. 6 before the record liquidation.
