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. 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.
Kendrick attributed the downward pressure on Bitcoin to a combination of factors. 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.
This article contains links to third-party websites or other content for information purposes only (“Third-Party Sites”). The Third-Party Sites are not under the control of CoinMarketCap, and CoinMarketCap is not responsible for the content of any Third-Party Site, including without limitation any link contained in a Third-Party Site, or any changes or updates to a Third-Party Site. CoinMarketCap is providing these links to you only as a convenience, and the inclusion of any link does not imply endorsement, approval or recommendation by CoinMarketCap of the site or any association with its operators.
This article is intended to be used and must be used for informational purposes only. It is important to do your own research and analysis before making any material decisions related to any of the products or services described. This article is not intended as, and shall not be construed as, financial advice.
The views and opinions expressed in this article are the author’s [company’s] own and do not necessarily reflect those of CoinMarketCap.
