Bitcoin plunged to a low of $89,000 on the 13th, but quickly made a V-shaped reversal, and the strong upward momentum has not yet shown any obvious selling pressure, still standing above $97,000.

Since the US CPI data will be released tonight, if there are signs of resurgent inflation again, Bit and US stocks may face another round of violent fluctuations.

In this regard, Geoff Kendrick, Head of Global Digital Assets Research at Standard Chartered Bank, warned in a report released yesterday that if Bit "clearly falls below $90,000", it may face further downside risk, as Bit spot ETF may see large-scale liquidation, leading to an increase in "convexity risk", which could push Bit down to a low of $80,000:

We believe that if Bit clearly falls below $90,000, it may fall another 10% in the short term to a low of $80,000, and the prices of all other digital assets are likely to follow suit, and once this correction is over, we will recommend accumulating long positions again.

ETF Liquidation Wave and Macroeconomic Pressure

Geoff Kendrick pointed out that since the US presidential election, the purchase of Bit spot ETFs has only reached the breakeven point, and the risk is that forced or panic selling will exacerbate the current selling pressure driven by macroeconomic factors, $90,000 is the key price level for Bit, and if it clearly falls below it, it may further trigger a 10% correction across all digital assets.

He also emphasized the impact of the macroeconomic environment:

Since Fed Chairman Powell turned hawkish on December 18, digital assets have been affected by the selling pressure driven by macroeconomic factors, with Bit falling to around $90,000 on January 13, and the risk is that the selling of digital assets may become a self-fulfilling prophecy.

Geoff Kendrick further explained that since the US presidential election, the purchase of Bit spot ETFs and MicroStrategy's Bit purchases have only reached the breakeven point, and most of the Bit selling in the past few days has been at a loss, and the risk of market price adjustment is increasing.

Target Price of $200,000 by the End of 2025

However, despite the short-term risks, Geoff Kendrick remains optimistic about Bit's long-term potential, pointing out that it may be wise to be cautious about digital assets in the next week or so, but with the re-entry of institutional funds under the Trump administration, Standard Chartered Bank still has a target price of $200,000 for Bit by the end of 2025.

In a report released in November last year after Trump's victory, Standard Chartered Bank pointed out that Trump's various cryptocurrency promises, including firing SEC Chairman Gary Gensler, incorporating Bit into the national strategic reserve, and making the US a Bit superpower, will all drive the rise of Bit, and is optimistic that Bit will break through $200,000 by the end of this year.

Further Reading:Standard Chartered Bank is optimistic that Bit will break $125,000 by the end of this year, and will rise another 60% by 2025