Commonplace Chartered warned that Bitcoin (BTC) might probably slip additional to between $69,000 and $76,500 over the subsequent two days, persevering with its current streak of crimson weekends.
In line with the lender’s head of digital asset analysis Geoffrey Kendrick, the draw back danger 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 spot 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 contributors want the asset class closed for the weekend.”
He added that Bitcoin’s drop under $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 might not be over.
He additionally highlighted a rising disconnect between ETF positioning and hedge fund brief 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 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 lots (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 relating to draw back dangers, warning that Bitcoin’s key convexity danger stage of $90,000 had been breached.
He had mentioned earlier within the week:
“Whereas BTC trades comparatively nicely throughout the digital asset complicated, it’s now caught up within the broader risk-off sentiment.”
Kendrick added that decrease US Treasury yields would possibly provide long-term help whilst near-term sentiment stays bleak however cautioned in opposition to shopping for the dip earlier than a extra decisive dip.
Waiting for the weekend, Kendrick expressed skepticism that danger property would rally given looming geopolitical tensions and tariff implementations.
He mentioned:
“Most likely honest to imagine we’ve got had the Trump tariff noise now… However are danger property actually going to rally into the weekend now we’ve got had the unhealthy information? I doubt it.”
Recalling the same interval in August 2024 — when panic promoting pushed Bitcoin under $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.
