JPMorgan analysts have highlighted a concerning trend in the cryptocurrency market, observing weakening institutional demand for Bitcoin and Ethereum futures on the CME exchange. The futures are nearing backwardation, a condition where futures prices fall below spot prices, signaling low demand. This development reflects diminishing interest from institutional investors who utilize CME's regulated futures for crypto exposure.

Moreover, momentum indicators for both Bitcoin and Ethereum have been declining, with Ethereum's momentum entering negative territory. Analysts attribute part of this bearish outlook to the absence of expected cryptocurrency-focused initiatives from the U.S. government in the near term.