Bitcoin (BTC), the leading cryptocurrency, is predicted to decline to $50,000-$52,000 due to factors such as ETF outflows, weak market response to spot ETFs, and broader macroeconomic conditions. Despite the short-term bearish outlook, Standard Chartered remains bullish on Bitcoin's long-term prospects, forecasting a price target of $150,000 by 2024 and $250,000 by 2025.
Bitcoin Faces Steep Decline, Analyst Predicts Drop to $50,000-$52,000
Jakarta, Indonesia - Bitcoin (BTC), the preeminent cryptocurrency in the market, is experiencing a significant devaluation, prompting analysts to revise their price forecasts. Standard Chartered Bank analyst Geoffrey Kendrick has projected a potential跌幅of Bitcoin to a range between $50,000 and $52,000, a decline from its recent level above the psychological threshold of $60,000.
Kendrick attributes this anticipated decline to a combination of factors, including consecutive outflows from bitcoin exchange-traded funds (ETFs) in the United States and a lukewarm market response to the launch of bitcoin and ether spot ETFs in Hong Kong. The analyst also points to the lackluster trading volume in Hong Kong's spot crypto ETF as a contributor to the recent Bitcoin price drop.
Beyond the specific factors affecting the cryptocurrency market, Standard Chartered's analysis highlights the broader macroeconomic environment as a contributing factor to Bitcoin's price weakness. Kendrick emphasizes that the reduction in liquidity measures, particularly in the United States since mid-April, has adversely impacted assets like cryptocurrencies that typically thrive in an environment of ample liquidity.
Amid the heightened geopolitical tensions and the prospect of more aggressive monetary policy tightening by the Federal Reserve to combat inflation, Kendrick underscores the importance of liquidity. The analyst notes that a supportive reading in the US Consumer Price Index (CPI) data scheduled for release on May 15 could further weigh on Bitcoin's price, potentially pushing it into the lower price range.
Despite the near-term bearish outlook, Standard Chartered maintains a positive long-term view on Bitcoin. The bank has even raised its year-end price target for Bitcoin in 2024 to a range between $100,000 and $150,000, implying a potential rise to $250,000 by 2025, contingent upon strong inflows into spot bitcoin ETFs and potential purchases by foreign exchange reserve managers.
Kendrick acknowledges that the realization of this bullish scenario may take time, but he suggests that the approach of the US presidential election, which former President Donald Trump could potentially win, might trigger a surge in Bitcoin's price from around September through the end of the year.
The analyst's predictions, however, should be taken with caution, as the cryptocurrency market remains highly volatile and subject to unpredictable external factors. Investors are advised to conduct thorough research and exercise caution before making investment decisions.
