JPMorgan says bitcoin futures oversold as silver flips overbought, sees $8,500 gold long term

JPMorgan analysts say bitcoin futures appear oversold while gold and silver futures have moved into overbought territory, as investors increasingly favor precious metals over bitcoin across both retail and institutional channels.

Retail investors embraced the so-called “debasement trade” for much of 2025, buying both bitcoin and gold exchange-traded funds, but that trend shifted around August, when cumulative bitcoin ETF flows stagnated and then declined in the fourth quarter, the JPMorgan analysts, led by managing director Nikolaos Panigirtzoglou, said in a Wednesday report.

Over the same period, gold ETF inflows increased sharply and ended the year with close to $60 billion in cumulative inflows, the analysts noted. Most inflows into silver ETFs also occurred in the final quarter of 2025, coinciding with bitcoin ETF outflows, suggesting a rotation by retail investors away from bitcoin toward precious metals, the analysts added.

Institutional behavior has reinforced that shift, according to the analysts. JPMorgan’s proxy for institutional futures positioning — based on changes in CME futures open interest — shows a sharp increase in long positioning in silver during the last quarter of 2025 and into early 2026, driven largely by hedge funds. A similar buildup has been observed in gold futures over most of the past year.

In contrast, the analysts said bitcoin futures positioning has not seen a comparable increase over the past year.

Momentum indicators, which the analysts use as a proxy for positioning by trend-following traders such as commodity trading advisers, show a clear divergence across the three assets. Gold futures are overbought, while silver futures are currently very overbought, and bitcoin futures are oversold, the analysts said. They added that this positioning raises the risk of near-term profit-taking or mean reversion in gold and silver.

Indeed, since the report was published, both silver and gold have pulled back from recent highs.

The analysts also highlighted structural differences in liquidity across the assets using the Hui-Heubel ratio, a measure of market breadth and liquidity. Gold consistently shows a lower ratio, indicating deeper liquidity and broader market participation. Silver’s ratio is higher, reflecting thinner liquidity, and the analysts said the recent decline in silver’s market breadth may have amplified recent price moves. Bitcoin has the highest Hui-Heubel ratio of the three, pointing to thinner liquidity and greater sensitivity to relatively small order flows.

Despite near-term risks for precious metals, the analysts remain bullish on gold over the longer term. They said allocations to gold by both private investors and central banks continue to rise. The analysts reiterated their view that private investor allocation to gold could increase from just above 3% today to about 4.6% over the coming years, assuming households continue replacing long-duration bond holdings with gold as an equity hedge. Under that scenario, the analysts said gold could reach a theoretical price range of $8,000 to $8,500.

Last November, the JPMorgan analysts said they maintained an upside case for bitcoin of roughly $170,000 over the next six to 12 months, based on its volatility-adjusted comparison with gold. It is unclear whether that target still applies. JPMorgan did not respond to The Block’s request for comment.