Customary Chartered warned that Bitcoin (BTC) might probably slip additional to between $69,000 and $76,500 over the subsequent two days, persevering with its latest streak of pink weekends.
In response to the lender’s head of digital asset analysis Geoffrey Kendrick, the draw back threat is pushed by continued ETF outflows and mounting hedge fund quick place.
ETF outflows and hedge fund shorts
Kendrick detailed rising considerations over the market’s latest weak point and lamented the absence of prolonged breaks loved by different markets.
He mentioned:
“It’s on the finish of weeks like this that digital asset individuals want the asset class closed for the weekend.”
He added that Bitcoin’s drop beneath $80,000 — as soon as a key resistance degree following Trump’s election victory — raises questions on how far the sell-off would possibly go.
Kendrick’s evaluation pointed to important ETF exercise as a harbinger of additional declines. He famous that Bitcoin ETF outflows virtually touched $1 billion on Feb. 25, which is a important threshold. Regardless of the numerous outflows, Kendrick believes the promote stress might not be over.
He additionally highlighted a rising disconnect between ETF positioning and hedge fund quick publicity based mostly on CFTC knowledge.
Kendrick noticed that for the reason that US election, ETF positions surged from $23.5 billion to a peak of $40.2 billion — now right down to $37.0 billion — whereas hedge fund shorts climbed from $7.9 billion to $11.3 billion as of Feb. 18.
Kendrick famous:
“ETF positions are up 71% since Nov. 5, however hedge fund shorts are up solely 43%. This suggests there’s nonetheless so much (the bulk) of outright longs within the ETFs. To the diploma these stem from underlying retail movement I feel they continue to be vulnerable to panic promoting.”
Geopolitical and regulatory uncertainty
Kendrick revisited his earlier warning concerning draw back dangers, warning that Bitcoin’s key convexity threat degree of $90,000 had been breached.
He had mentioned earlier within the week:
“Whereas BTC trades comparatively properly throughout the digital asset advanced, it’s now caught up within the broader risk-off sentiment.”
Kendrick added that decrease US Treasury yields would possibly provide long-term help at the same time as near-term sentiment stays bleak however cautioned in opposition to shopping for the dip earlier than a extra decisive dip.
Looking forward to the weekend, Kendrick expressed skepticism that threat property would rally given looming geopolitical tensions and tariff implementations.
He mentioned:
“Most likely honest to imagine we have now had the Trump tariff noise now… However are threat property actually going to rally into the weekend now we have now had the dangerous information? I doubt it.”
Recalling the same interval in August 2024 — when panic promoting pushed Bitcoin beneath $50,000 after a fast 5.5% decline — he famous that one other drop of comparable magnitude might see Bitcoin slide into the $69,000 to $76,500 vary.
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