Is Bitcoin’s recent dip just a blip, or a sign of deeper troubles ahead? Standard Chartered Bank is raising eyebrows with its latest forecast, suggesting a potential drop to $50,000. Let’s dive into the details and see what’s fueling this bearish outlook.
Bitcoin Faces Potential Further Decline to $50,000, Says Standard Chartered Bank
Standard Chartered Bank has issued a warning that Bitcoin’s recent stumble below the $60,000 mark could be the prelude to more significant losses. Geoffrey Kendrick, head of forex and digital assets research at Standard Chartered Bank, expressed concerns about Bitcoin’s price trajectory, stating that breaking the $60,000 support level opens the door for a potential decline to the $50,000 to $52,000 range.
What’s Behind the Potential Bitcoin Price Drop?
Kendrick attributes the downward pressure on Bitcoin to several converging factors:
- ETF Outflows: Five consecutive days of outflows from U.S. spot Bitcoin exchange-traded funds (ETFs) are creating selling pressure.
- Lukewarm Hong Kong ETF Launch: The launch of spot Bitcoin and Ether ETFs in Hong Kong didn’t generate the expected excitement, adding to the negative sentiment.
- Underwater ETF Positions: With the average purchase price for some ETFs now below $58,000, more than half of spot ETF positions are underwater, increasing the risk of liquidation.
- Tightening Liquidity: Deteriorating liquidity measures in the United States since mid-April are impacting various assets, including cryptocurrencies. As liquidity dries up, risk-on assets like Bitcoin face downward pressure.
See Also: Bitcoin Hasn’t Hit the Bottom Yet, Says Standard Chartered
Standard Chartered’s Long-Term Bitcoin Outlook
Despite the short-term concerns, Standard Chartered maintains its long-term bullish outlook. While they acknowledge the potential for a price recovery to take time, they still anticipate a rally leading up to the U.S. presidential election. Their price prediction targets for 2024 and 2025 remain at $150,000 and $250,000, respectively.
Key Takeaways for Bitcoin Investors
- Volatility is Inherent: Bitcoin is known for its price swings. Be prepared for both potential gains and losses.
- Monitor ETF Flows: Keep an eye on the inflows and outflows from Bitcoin ETFs, as they can significantly impact price.
- Consider Macroeconomic Factors: Pay attention to broader economic trends, such as liquidity and interest rates, as they can influence Bitcoin’s performance.
- Don’t Panic Sell: If you believe in the long-term potential of Bitcoin, avoid making rash decisions based on short-term price fluctuations.
Disclaimer: The information provided is not trading advice. Bitcoinworld.co.in holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.
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Disclaimer: The information provided is not trading advice, Bitcoinworld.co.in holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.