Commonplace Chartered warned that Bitcoin (BTC) may probably slip additional to between $69,000 and $76,500 over the subsequent two days, persevering with its current 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 brief place.
ETF outflows and hedge fund shorts
Kendrick detailed rising considerations over the market’s current 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 members want the asset class closed for the weekend.”
He added that Bitcoin’s drop beneath $80,000 — as soon as a key resistance stage 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 nearly touched $1 billion on Feb. 25, which is a essential threshold. Regardless of the numerous outflows, Kendrick believes the promote stress is probably not over.
He additionally highlighted a rising disconnect between ETF positioning and hedge fund brief publicity primarily based 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 all the way 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 may be nonetheless so much (the bulk) of outright longs within the ETFs. To the diploma these stem from underlying retail circulate I feel they continue to be susceptible to panic promoting.”
Geopolitical and regulatory uncertainty
Kendrick revisited his earlier warning concerning draw back dangers, warning that Bitcoin’s key convexity threat stage of $90,000 had been breached.
He had mentioned earlier within the week:
“Whereas BTC trades comparatively effectively inside 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 assist at the same time as near-term sentiment stays bleak however cautioned towards shopping for the dip earlier than a extra decisive dip.
Waiting for the weekend, Kendrick expressed skepticism that threat property would rally given looming geopolitical tensions and tariff implementations.
He mentioned:
“Most likely truthful to imagine now we have had the Trump tariff noise now… However are threat property actually going to rally into the weekend now now we have had the dangerous information? I doubt it.”
Recalling an identical 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 may see Bitcoin slide into the $69,000 to $76,500 vary.
