May 7, 2024
Bitcoin News

Standard Chartered Warns Bitcoin’s Potential Drop to $50,000

The recent plunge in Bitcoin’s price below the $60,000 mark may just be the beginning of a larger downward trend, cautioned Standard Chartered Bank.

Geoffrey Kendrick, head of the bank’s forex and digital assets research, highlighted that this breach could pave the way for a descent towards the $50,000 to $52,000 range, citing both crypto-specific and broader macroeconomic factors.

Crypto-Specific Concerns Trigger Alarm

Kendrick pointed out several crypto-specific concerns contributing to the current market unease.

Notably, there have been five consecutive days of outflows from U.S. spot Bitcoin exchange-traded funds (ETFs), coupled with a lukewarm response to the recent launch of spot Bitcoin and Ether ETFs in Hong Kong.

These factors, along with a risk of liquidation due to ETF purchases below the $58,000 mark, add significant pressure to Bitcoin’s price stability.

Broader Macroeconomic Trends Compound Woes

Beyond crypto-specific issues, Kendrick highlighted broader macroeconomic trends exacerbating Bitcoin’s price dynamics. Liquidity measures, particularly in the U.S., have been on a downward trajectory since mid-April.

With strong inflation data and diminishing prospects of Federal Reserve rate cuts, assets like cryptocurrencies, which rely on liquidity, are particularly vulnerable to these tightening conditions.

Standard Chartered Maintains Long-Term Optimism Amid Short-Term Turbulence

Despite the current bearish sentiment, Standard Chartered maintains its optimistic long-term outlook for Bitcoin’s price trajectory. Last month, the bank revised its 2024-end Bitcoin price prediction to $150,000, with a potential surge to $250,000 by 2025.

Kendrick reaffirmed these projections, indicating that while short-term challenges may persist, the longer-term outlook remains robust, especially with potential market catalysts such as a Trump election victory.

As Bitcoin traders brace for potential volatility in the coming weeks, the market will keenly await key events like the release of U.S. Consumer Price Index (CPI) data on the 15th, which could further influence the cryptocurrency’s trajectory.

Geoff Kendrick discussing his outlook for Bitcoin price by the end of 2024. Source: CNBC/YouTube

Image from Wallpapers.com

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