Bitcoin’s price is facing potential turbulence as Standard Chartered’s Geoff Kendrick warns of a critical support level at $90,000.
A break below this key level could lead to a 10% retracement, pushing Bitcoin’s price into the low $80,000.
This potential decline comes amid broader macroeconomic pressures and increased selling activity in digital asset markets.
Kendrick, the Global Head of Digital Assets Research at Standard Chartered, stated in a recent note that a “clean break below $90,000” would likely lead to further downside for Bitcoin and other cryptocurrencies.
He attributed this risk to the possibility of spot exchange-traded fund (ETF) unwinds, which could accelerate selling pressure.
At the time of writing, Bitcoin was trading around $95,300, up 3.7% in the past 24 hours.
– Advertisement –
ETF Unwinds and Macroeconomic Pressures Add to Selling Risks
In Kendrick’s analysis, the probability of forced or panic selling in the market is rising because spot Bitcoin ETF purchases are approaching the break-even levels.
He pointed out that most of the recent Bitcoin buys, including those made by MicroStrategy and other companies, are only getting their money back at this point. It may lead to selling as investors seek to minimize their possible losses.
Macroeconomic conditions are also playing a significant role in Bitcoin’s recent price movements.
Kendrick added that digital assets have been under pressure since Federal Reserve Chair Jerome Powell shifted his outlook on December 18.
This change in monetary policy has caused a selloff in risk assets, including cryptocurrencies, with Bitcoin nearing $90,000 on before a partial bounce back.
Kendrick also emphasized the self-fulfilling nature of sell-offs in digital assets. He pointed out that this is usually accompanied by sudden selling pressure as investors panic when prices start to drop.
Still, Standard Chartered continues to be bullish on Bitcoin, sticking to its end of year price target of $200,000 by 2025.
Analysts Maintain Bullish for Bitcoin Price Outlook Despite Volatility
Despite the fluctuations in the market, there are still several analysts who remain optimistic on the future performance of Bitcoin.
Fundstrat head of research, Thomas Lee, has stuck to his guns on the end of the year price prediction of $250,000 for Bitcoin.
Interviewed by CNBC, Lee explained the current price drop-off as a “normal correction”, saying that it is similar to previous cycles, during which Bitcoin’s price dropped by 35-55%.
Lee stressed that corrections and consolidations are crucial to the further long-term growth. He predicted that Bitcoin could trade between $90,000 and $100,000 in the near future before continuing its rise.
He also added that the analysis of Fibonacci suggests possible retrace levels that are as low as $70,000 and even $50,000, but such things are still just speculations.
Other market spectators, including Arthur Azizov, CEO at B2BINPAY, echo Lee’s views. Azizov said that Bitcoin may bounce back to $102k in February before the rest of the market follows suit.
He defined the current market as cyclical and normal and said that there cannot be growth without a correction.
Market Adjustments Reflect Broader Crypto Trends
The recent downturn of Bitcoin price has been seen along with a broader pullback across the cryptocurrency market.
Bitcoin rose to $108,000 in early January and then fell by 15%, with the asset currently being traded at $95,600.
This shift has raised many questions from the investors on whether the market is going through a long term bear run or simply going through a bear market.
