Bitcoin continues to face challenges in its recovery trajectory as it remains stagnant around $108,000 on Wednesday morning, marking a significant 14% decline from its all-time high of $125,000 reached on October 6. Geoff Kendrick, the global head of digital assets research at Standard Chartered, forecasts that a drop below $100,000 is “inevitable,” although he anticipates it will be a temporary condition. Kendrick encourages investors to remain alert, suggesting they be prepared to capitalize on any price dips should Bitcoin fall below this psychological threshold, which he believes could be a pivotal moment—perhaps the last time Bitcoin is priced below $100,000.
Kendrick emphasizes the importance of monitoring several key indicators, including the flow of investments between gold and Bitcoin, as well as overall liquidity measures. Notably, he points out a recent sharp selloff in gold that came hand-in-hand with a notable bounceback in Bitcoin prices, indicating a potential shift in market dynamics where Bitcoin may start outperforming gold, which has dominated the cryptocurrency landscape recently.
In his communications, Kendrick also referenced the “50 week moving average” for Bitcoin, which has proven to be a resilient benchmark since early 2023 when Bitcoin was priced around $25,000. He previously forecasted a rise to $100,000 by the end of 2024, maintaining a bullish long-term outlook despite current market conditions. He now projects Bitcoin could reach $200,000 by the end of 2025 and potentially soar to $500,000 by 2028.
Meanwhile, market analysts are observing shifting sentiments among traders. Market-implied probabilities derived from event contracts on Robinhood indicate that traders believe there is a 66% likelihood Bitcoin will fall below $100,000 this year, with a further 33% chance of a decline below $90,000.
Nic Puckrin, co-founder of Coin Bureau, added insight by noting that Bitcoin funding rates are declining into negative territory while open interest rises. This trend suggests that traders are primarily establishing short positions, as confirmed by the current long/short ratio in the market.
Puckrin speculates that any significant market movement might be precipitated by the reopening of the U.S. government or a de-escalation in the U.S.-China trade tensions. He also points to next week’s Federal Reserve meeting, which could introduce another round of rate cuts as a potential catalyst for market change.
He urges caution among traders considering leveraged shorts, highlighting that typically, when market players overwhelmingly bet against a recovery, the opposite often occurs, resulting in swift market reversals. In the current climate, Puckrin suggests there is greater potential for positive developments than negative ones, advising traders to think strategically before committing to positions that bet against Bitcoin’s resurgence.
