What to know:
- Macro headwinds have seen digital assets sell-off since mid-December, the report said.
- The bank noted that investors who took on bitcoin exposure since the U.S. election are now only breaking even.
- If bitcoin breaks $90,000 to the downside it could lead to a further 10% retracement, Standard Chartered said.
In simpler terms, the prices of Bitcoin (BTC) and various digital currencies are falling due to a broader market downturn influenced by macroeconomic factors. There’s a possibility that compulsory selling might exacerbate this trend, according to a report issued by Standard Chartered Bank on Monday.
The dip in the market was caused by a particularly stern-sounding press conference given by Federal Reserve Chairman Jerome Powell in mid-December.
Investors who entered the bitcoin market after the U.S. election in November have merely recovered their initial investment, indicating a potential stalemate. There’s a possibility that forced or panic selling could exacerbate the downtrend, as seen among exchange-traded fund (ETF) investors and Bitcoin buyer MicroStrategy (MSTR).
According to Geoff Kendrick, the chief of digital assets research at Standard Chartered, the potential for losses due to market fluctuations (also known as ‘mark-to-market’) is increasing.
According to the report, if Bitcoin, the most significant cryptocurrency, drops below the crucial $90,000 threshold, it might decrease by approximately 10%, potentially reaching the lower $80,000 region. In turn, other digital currencies are expected to follow suit and experience similar declines as well.
The bank advises adding bitcoin once the retracement is over.
According to Standard Chartered’s prediction, Bitcoin could reach $200,000 by the end of this year, driven by a potential increase in institutional investments as a result of the new Trump administration.
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2025-01-15 14:16