• Bitcoin’s price fall below $60,000 could lead to further decline to around $50,000, according to Standard Chartered Bank
• Factors contributing to the potential price drop include consecutive outflows from U.S. spot Bitcoin ETFs, poor response to the launch of spot Bitcoin and Ether ETFs in Hong Kong, and broader macroeconomic trends like tightening liquidity conditions
• Standard Chartered maintains its Bitcoin price prediction targets of $150,000 by the end of 2024 and potentially $250,000 at some point in 2025
Bitcoin’s price has fallen below $60,000 recently, sparking speculation about how much further it could decline. Standard Chartered Bank has weighed in with an analysis of what’s driving the drop and how low bitcoin could go.
Bitcoin’s Steep Price Decline Below $60,000
Bitcoin’s price peaked above $69,000 in November 2021 but has since fallen below the $60,000 mark in recent weeks. This significant decline from its all-time highs could be just the beginning of further pain ahead.
According to Standard Chartered Bank, bitcoin’s price could fall as low as $50,000 if current conditions persist. The bank sees a combination of crypto-specific and macroeconomic factors weighing on bitcoin’s price outlook.
Crypto-Specific Concerns Putting Downward Pressure on Bitcoin
Several crypto-specific developments have contributed to bitcoin’s price drop below $60,000, according to Standard Chartered’s analysis.
First, bitcoin exchange-traded funds (ETFs) have seen five consecutive days of outflows recently. With investors pulling money out of these funds, it creates selling pressure in the market. More than half of the ETF positions are currently underwater, meaning purchased at higher prices than today. This raises risks of further liquidations if the price decline continues.
In addition, the launch of new spot bitcoin ETFs in Hong Kong saw lackluster demand. The low trading volumes of these new products have been a disappointment, further dampening bitcoin’s price.
Broad Macroeconomic Trends Also Weighing on Bitcoin
Bitcoin’s price does not trade in isolation from broader economic forces. Tightening financial conditions are also playing a role in its decline.
Liquidity conditions have deteriorated rapidly since mid-April, especially in the US. Assets like bitcoin that benefit from ample market liquidity suffer when liquidity starts drying up.
With inflation running hot and the Fed hiking rates aggressively, markets are pricing in tighter monetary policy for longer. This outlook provides a challenging backdrop for riskier assets like bitcoin.
Standard Chartered Maintains $150,000 Target for End of 2024
Despite the current weakness, Standard Chartered is standing by its price target of $150,000 for bitcoin by the end of 2024. The bank believes bitcoin could rally in the second half of 2024 into 2025 as macro conditions improve and adoption continues rising.
Conclusion
Bitcoin is in the midst of a significant correction, weighed down by both crypto-specific and macroeconomic headwinds. But Standard Chartered believes much of the selling pressure is temporary and expects bitcoin to regain its uptrend over the long run. The path forward may be volatile, but the bank maintains conviction that bitcoin’s best days still lie ahead.
