Standard Chartered’s Global Head of Digital Assets Research Geoff Kendrick warned of potential downside for bitcoin if it makes a "clean break below $90,000."
In a note on Tuesday, Kendrick highlighted the risk of "convexity risks" due to the heightened potential for spot exchange-traded fund unwinds, which could push bitcoin into the low $80,000s in the near term.
"We think that a clean break below $90,000 for bitcoin would open up 10% of further downside near-term, to the low $80,000s," Kendrick said. "Prices of all other digital assets would likely follow, and once that retracement has run its course, we would recommend accumulating longs again."
The price of bitcoin traded at around $95,300 at publication time, according to The Block's BTC price data, rising 3.7% over the past 24 hours.
Kendrick noted that "spot bitcoin ETF purchases since the U.S. election are now only breaking even, and the risk is that forced or panic selling adds to the current macro-driven sell-off." He added that "$90,000 is a key level for bitcoin, and a clean break below that could open up a further 10% retracement in all digital assets."
The Standard Chartered head of research also emphasized the impact of macroeconomic conditions.
"[D]igital assets have been caught up in a macro-driven sell-off since Fed Chair Powell turned hawkish on Dec. 18," Kendrick said. "Bitcoin fell to around $90,000 on Jan. 13, and the risk is that the sell-off across digital assets becomes self-fulfilling."
He explained that "since the U.S. election, spot ETF purchases of bitcoin, along with bitcoin purchases by MicroStrategy, are only breaking even as of now." Kendrick said that the majority of bitcoin sales in the past few days have come at a loss, and "the risk of mark-to-market pain is building."
Despite the short-term risks, Kendrick remained optimistic about bitcoin's longer-term potential.
"Discretion may be the better part of valour in digital assets over the next week or so," he advised while reiterating that Standard Chartered continues to target bitcoin at the $200,000 level by end-2025, as institutional inflows resume under the Trump administration.
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