Bitcoin Price Action Analysis by Standard Chartered Expert
Geoffrey Kendrick, the head of digital assets research at Standard Chartered, recently shared his insights on Bitcoin’s recent price movements. According to Kendrick, Bitcoin’s current price action indicates a need for sovereign accumulation or improved geopolitical clarity to propel the cryptocurrency higher, especially in the current risk-off market sentiment.
Key Points Highlighted by Kendrick:
- Bitcoin’s recent crash brought its price close to the levels seen on Nov. 6, 2024, following the US presidential election.
- The cryptocurrency hit a four-month low of $76,500 on March 10 before attempting a recovery above $80,000.
- Bitcoin’s 30-day implied volatility stood at around 55% during this period.
- Kendrick noted that Bitcoin’s decline aligned with major US tech stocks as risk assets faced challenges due to rising macroeconomic concerns.
- He compared Bitcoin’s performance to the “Magnificent 7” tech stocks, including Apple, Microsoft, Nvidia, Alphabet, Meta, Tesla, and Amazon, all of which experienced sell-offs amidst market uncertainty.
Analysis of Bitcoin’s Performance:
Since the current US administration took office, Bitcoin has closely followed the volatility-adjusted performance of these tech stocks, indicating that broader risk asset sentiment plays a crucial role in driving price movements for the cryptocurrency.
According to Kendrick, Tesla, Meta, and Apple have shown the closest equity counterparts to Bitcoin in terms of adjusted performance, suggesting that Bitcoin’s price action reflects overall risk-off sentiment rather than specific challenges related to the asset itself.
Short-Term Outlook and Potential Catalysts:
Kendrick cautioned that Bitcoin faces further downside risks in the short term due to macro uncertainties and emphasized the need for a significant catalyst to reignite its upward trend. He highlighted the importance of factors such as sovereign buying from the US or other nations.
Furthermore, the possibility of Federal Reserve rate cuts remains a critical factor. A potential policy shift at the Fed’s May meeting could stabilize risk markets, with market expectations for a rate cut in May rising from 50% to 75%. This shift could benefit Bitcoin in the long run.
Long-Term Price Targets:
Despite the short-term challenges, Kendrick maintained his long-term bullish stance on Bitcoin, reiterating his previous targets of $200,000 by 2025 and $250,000 by 2026. He emphasized that recent volatility underscores the case for future Fed rate cuts, which could act as a positive catalyst for Bitcoin’s price movement.
Ultimately, Kendrick advised investors to remain agile in navigating the current market conditions and reaffirmed his belief in Bitcoin’s long-term growth trajectory despite the near-term turbulence.
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