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Bitcoins recent bounce has yet to dispel doubts about its vulnerability following a rout in May.

The cryptocurrency has jumped about 14% over two days and was trading at $38,295 as of 11:05 a.m. in London on Thursday. While the momentum may cheer bulls, a JPMorgan Chase & Co. team said backwardation in a part of the futures market -- where the spot price is above futures prices -- is reason for caution.

We believe that the return to backwardation in recent weeks has been a negative signal pointing to a bear market, JPMorgan strategists led by Nikolaos Panigirtzoglou wrote in a note. They added that Bitcoins relatively depressed share of total crypto market value is another concerning trend.

The JPMorgan analysis is based on the 21-day rolling average of the 2nd Bitcoin futures spread over spot prices, and pointed out the Bitcoin futures curve was in backwardation for most of 2018. That year, the cryptocurrency fell 74% after a boom. Backwardation is an unusual development and a reflection of how weak Bitcoin demand is at the moment from institutional investors who tend use contracts listed on the Chicago Mercantile Exchange, according to the report.

The cryptocurrencys share of overall crypto market value is about 42% currently, down from roughly 70% at the start of the year, according to data from tracker CoinGecko. For some analysts, thats in part a sign of retail-driven investor froth lifting other coins.

Bitcoins share may need to top 50% to make it easier to argue the current bear market is over, the JPMorgan strategists said in the June 9 report. Panigirtzoglou previously flagged Bitcoins declining market share in early May, ahead of tumble in the coins price.

Traders are waiting for the next catalyst to break Bitcoin from a $30,000 to $40,000 range thats been in place since a decline from a record of almost $65,000 in April. Public criticism of the digital currencys energy needs by tycoon Elon Musk and a Chinese regulatory crackdown are among obstacles. Bulls got a bit of a lift Wednesday after El Salvador made Bitcoin legal tender.

We will need to see a break here for the bulls to feel were out of this period of vulnerability, Chris Weston, head of research with Pepperstone Financial Pty, wrote in a note Thursday.

(Updates markets in the second paragraph.)

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Bitcoin ($BTC USD) Cryptocurrency Price Outlook: Futures a Warning to JPMorgan - Bloomberg