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Standard Chartered Bank has warned that Bitcoin's recent drop below the $60,000 mark could be the beginning of more significant losses in the near future.
Standard Chartered Bank has warned that Bitcoin's recent drop below the $60,000 mark could be the beginning of more significant losses in the near future.
SC Bank has warned that Bitcoin's recent drop below the $60,000 mark could be the beginning of more significant losses in the near future. Geoffrey Kendrick, head of forex and digital assets research at Standard Chartered Bank, expressed concerns about the leading cryptocurrency's price trajectory, stating that the breach of the $60,000 support level opens the path for a potential decline to the $50,000 to $52,000 range.
Firstly, he pointed out that there have been five consecutive days of outflows from U.S. spot Bitcoin exchange-traded funds (ETFs). Additionally, the launch of spot Bitcoin and Ether ETFs in Hong Kong received a lackluster response, contributing to the overall negative sentiment.
The outflows from U.S. spot Bitcoin ETFs, combined with the average purchase price currently being below $58,000, raise the risk of liquidation for some ETF positions, according to Kendrick. He noted that more than half of the spot ETF positions are underwater, further fueling the potential for liquidation.
Kendrick also highlighted broader macroeconomic factors impacting Bitcoin's price dynamics. The deterioration of liquidity measures, particularly in the United States since mid-April, has affected various assets, including cryptocurrencies. As liquidity tightens, it puts downward pressure on risk-on assets like Bitcoin.
While Standard Chartered Bank previously raised its Bitcoin price prediction targets for 2024 and 2025 to $150,000 and even $250,000, respectively, Kendrick maintains these targets. He believes that a price recovery may take some time but anticipates a potential rally towards the lead-up to the U.S. presidential election.
