Key Points
- Standard Chartered warns of a potential 10% drop in Bitcoin’s price if it falls below $90,000.
- Bitcoin’s price could plummet to as low as $80,000 in the short term due to “convexity risks.”
Standard Chartered, a British multinational bank with assets exceeding $850 billion, predicts a significant decline in the price of Bitcoin (BTC). Geoff Kendrick, the Global Head of Digital Assets Research at the bank, warns that Bitcoin could face a 10% price drop if it falls below $90,000.
On Monday, Bitcoin’s price dipped below $90,000 for the first time since November, with a daily low of $89,256. However, buyers quickly intervened, pushing the digital asset’s price back above $90,000. According to CoinMarketCap data, Bitcoin is currently trading at $96,017.86, representing a 4.53% increase over the past 24 hours. The high for Tuesday stands at $97,352.66, with a retest of the $100,000 mark appearing likely.
Potential Drop to $80K
In a report from TheBlock, Kendrick elaborates on the “convexity risks” that Bitcoin faces. These risks arise from the potential unwinding of spot exchange-traded funds (ETFs), which could result in capital outflows and cause Bitcoin’s price to drop to as low as $80,000 in the short term.
Kendrick suggests that a drop below $90,000 could trigger a further 10% decline in Bitcoin’s price, bringing it to the low $80,000s. He also warns that other digital assets could follow suit.
If Bitcoin falls below $90,000, Kendrick predicts a corresponding decline in the broader digital asset sector, with potential losses of at least 10%. He also notes that purchases of spot Bitcoin ETFs since the US election are now only breaking even, and the risk of forced or panic selling could exacerbate the current sell-off.
Recent Bitcoin purchases by MicroStrategy and US investors via spot Bitcoin ETFs have broken even at the current prices. Kendrick warns of the increasing risk of short-term losses, but maintains a long-term bullish outlook, predicting Bitcoin’s price could reach $200,000 by the end of the year.
Continued Accumulation of Bitcoin
A deeper analysis of Bitcoin reveals a continued uptrend in its accumulation. Bitcoin’s accumulation has soared since October 2024, suggesting that investors remain bullish on the cryptocurrency.
The Relative Strength Index (RSI) for Bitcoin currently stands at 49.54, indicating an even match between buyers and sellers. This suggests the potential for a breakout in either direction in the near future.
