After bitcoin plummeted roughly 75% from its November all-time high, crypto markets seem to have "found a floor," JPMorgan said in a note on Monday. 

Bitcoin and ether have soared 36% and 102% from their mid-June lows, respectively, and the total market capitalization of cryptocurrencies has reclaimed the $1 trillion level, according to data from CoinMarketCap. 

Analysts at JPMorgan said there are two reasons driving the recent strength in the cryptocurrency market.

"What has helped, we think, has been more limited new contagion from the collapse of Terra/Luna," JPMorgan said, referring to the stablecoin implosion that led to tens of billions of dollars in losses and sparked leverage unwind that wiped out crypto firms like hedge fund Three Arrows Capital and crypto broker Voyager Digital.

"However, we think the real driver has been the Ethereum merge and positive data following the launch of the Sapolia testnet in early July and Ropsten testnet in June, indicating the merge is viable in 2022," JPMorgan said.

The upcoming Ethereum upgrade has been highly anticipated by investors. The merge is designed to scale the Ethereum blockchain from a proof-of-work network to a proof-of-stake system, which is faster and less energy intensive. 

A successful Ethereum merge later this year should give a push to the crypto markets, JPMorgan said. The merge is currently expected in September, depending on how the upcoming Georli testnet performs. That test is scheduled for August 11 and is one of the last steps before the merge.  

The ongoing recovery of the crypto market could depend on the upcoming Ethereum merge in the short term as crypto investors look for a much-needed boost in sentiment.