Leading international cross border bank, Standard Chartered has predicted steep price declines for Bitcoin, foreseeing a pessimistic future outlook for the pioneer cryptocurrency amidst broader market downturn.
Bitcoin Could Plummet To $50,000
As of writing the price of Bitcoin is trading above $59,000, according to CoinMarketCap. The cryptocurrency has been experiencing massive price drops after the Bitcoin halving on April 20, 2024, further exacerbated by the Federal Reserve’s (FED) decision to keep interest rates unchanged during the Federal Open Market Committee (FOMC) meeting On Wednesday, May 1.
Standard Chartered bank has cautioned investors of more price drops in the future, predicting that Bitcoin’s price could settle between $50,000 and $52,000, recording more than $20,000 loss from it’s all time high of over $73,000 in March, 2024. This new forecast follows the bank’s previous projection which anticipated Bitcoin rise to $150,000 by the end of 2024.
The head of Standard Chatered’s forex and digital assets research, Geoffery Kendrick revealed a combination of factors that could drive Bitcoin’s decline in a statement to The Block on Wednesday. Kendrick highlighted broader macroeconomic influences and crypto-specific factors impacting the price of Bitcoin, particularly challenges like the reduction of liquidity measures within the United States since mid-April.
“Liquidity matters when it matters, but with a backdrop of strong US inflation data and less likelihood of Fed rate cuts, it matters at the moment,” Kendrick stated.
Standard Chartered also cited the series of massive outflows witnessed by Spot Bitcoin ETfs in the US, as well as the lackluster performance of Ethereum Spot ETFs in Hong Kong, China.
On May 1, approximately 10 US Spot Bitcoin ETFs recorded staggering outflows, collectively totaling $563.7 million. Kendrick also disclosed that “more than half of the Spot ETF positions are underwater.” He suggests that the risk of liquidity should be considered, especially as investor sentiment may be shifting away from these digital assets.
BTC Price Jumps Over $1,000 Amidst Market Downturn
At some point on May 2, Bitcoin had witnessed significant price decreases that pushed its value below $58,000. However, currently the cryptocurrency has recorded more than 1.56% increase, spiking by more than $1,000 in just a day.
Various analysts have predicted more plunges for the cryptocurrency, expecting Bitcoin to reach its bottom during this bearish period. Analysts like Ali Martinez and Michael van de Poppe anticipate a few more price corrections before the broader market settles, paving the way for Bitcoin to prepare for a potential bullish rebound.
BTC price jumps above $60,000 | Source: BTCUSD on Tradingview.com
Featured image from MarketWatch, chart from Tradingview.com
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