Last week, Bitcoin once approached the much-anticipated $100,000 mark, but failed at the last moment, and then continued to fall for several days, and briefly fell below $91,000 in the early morning of today (27). According to Standard Chartered's analysis, Bitcoin's current correction may not be over yet, and it may fall further below $90,000. The trigger was actually the nomination of the US Treasury Secretary.

The nomination of the Treasury Secretary shocked the market, and Bitcoin was under pressure in the short term

Geoff Kendrick, head of digital asset research at Standard Chartered Bank, pointed out in his analysis on Tuesday that the recent correction pressure on Bitcoin mainly came from the appointment of the US Treasury Secretary. He pointed out:

The main reason for the decline in Bitcoin was the market's reduction in the U.S. Treasury term premium after Scott Bessent was nominated as Treasury Secretary.

The term premium is the additional compensation that investors demand for taking on the risk of long-term government bonds, reflecting the market's expectations of future economic risks. As the term premium declines, long-term U.S. Treasury yields fall, and market confidence improves.

After U.S. President-elect Donald Trump nominated hedge fund manager Scott Bessent as Treasury Secretary, the U.S. Treasury market responded immediately, with yields on 5- to 30-year Treasury bonds falling by more than 10 basis points across the board.

Geoff Kendrick believes that this wave of government bond recovery has directly impacted the attractiveness of Bitcoin, making it difficult for the currency price to maintain its upward trend in the short term. He explained:

One of the main uses of Bitcoin is to fight against traditional financial instability, whether it is banking system risks or Treasury market problems. But as term premiums decline and market confidence in U.S. Treasuries rises, demand for Bitcoin will naturally be suppressed in the short term.

Options settlement exacerbates short-term volatility

In addition to changes in the U.S. Treasury market, another key factor that has put pressure on Bitcoin recently is the settlement of monthly options that are about to expire on Friday.

Geoff Kendrick cited data from Deribit and pointed out that the current open interest in options contracts is as high as 18,000 bitcoins, and the execution price is concentrated in the range of US$85,000 to US$100,000, forming a "suppression zone" for price fluctuations. He said:

Bitcoin prices are often suppressed in the run-up to option expiration, causing movement to stagnate in the short term.

Where is the key support level?

However, Geoff Kendrick pointed out that the recent strong demand from institutions still provides important support for Bitcoin. Since the end of the US election, Bitcoin spot ETFs have accumulated about 77,000 Bitcoins, and MicroStrategy has bought 134,000 Bitcoins. He pointed out:

MicroStrategy's buying pace shows no sign of slowing down, and it is almost impossible to sell these bitcoins.

Geoff Kendrick emphasized that since the US election, the average purchase price of Bitcoin spot ETF, MicroStrategy, has been about US$88,700, which may provide short-term support for Bitcoin.

In the short term, Bitcoin may consolidate in the range of $85,000 to $88,700 to accumulate momentum for the next wave of gains.

Long-term outlook remains positive

Although under short-term pressure, Geoff Kendrick remains confident in the long-term trend of Bitcoin. He reiterated that his target price for Bitcoin by the end of this year is $125,000, and predicted that by the end of 2025, Bitcoin is expected to advance to $200,000.