Bitcoin faces a potential 10% retracement to the low $80,000s if it breaks below the critical $90,000 support level, according to Geoff Kendrick, Global Head of Digital Assets Research at Standard Chartered.
In a note issued Tuesday, Kendrick highlighted risks stemming from “convexity risks” tied to spot exchange-traded fund (ETF) unwinds, which could exacerbate downward pressure. “A clean break below $90,000 for bitcoin would open up 10% of further downside near-term,” Kendrick said. He also predicted that other digital assets would likely follow bitcoin’s trajectory, advising investors to consider accumulating positions after the retracement stabilizes.
Bitcoin was trading around $95,300 at the time of publication, reflecting a 3.7% gain over the past 24 hours. However, Kendrick warned that macroeconomic factors remain a headwind, including selling pressures since Federal Reserve Chair Jerome Powell turned hawkish on December 18.
“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,” Kendrick explained. He noted that the majority of recent bitcoin sales have occurred at a loss, heightening the risk of a self-fulfilling downward spiral.
Despite these short-term challenges, Kendrick reaffirmed Standard Chartered’s bullish long-term outlook, with a $200,000 bitcoin price target by the end of 2025, driven by expected institutional inflows under the Trump administration.
“Discretion may be the better part of valor in digital assets over the next week,” Kendrick advised, urging caution amid the current volatility.