Bit is on its way to further decline, with Standard Chartered bank representatives expecting the price to reach the $69,000 - $76,500 USD range.
Standard Chartered: Bit could plummet to $69,000 USD due to ETF Capital Dump. Image: The Crypto Basic
Bit is facing significant downward pressure in recent days. The forecast from Standard Chartered bank suggests the king coin could "crash" to the $69,000 - $76,500 USD range by the end of this week or the beginning of next week.
According to Geoffrey Kendrick, head of digital assets research at Standard Chartered, Bit is in a strong correction phase, with many signs indicating that selling pressure has not yet subsided. He predicts Bit will decline further before having a chance to recover. And if the price touches the $69,000 - $76,500 USD support zone, it will be an attractive buying opportunity.
Selling pressure from ETFs and hedge funds
Bit's price has adjusted significantly in recent times. On the last day of February, the king coin broke through the $80,000 USD mark, dropping to $78,258 USD, before recovering to around $84,979 USD at the time of writing.
Bit price volatility over the past 7 days, screenshot taken on CoinGecko at 10:35 AM on 03/01/2025
According to Kendrick, an important factor to watch is the capital outflow from Bit ETFs, recording over $1 billion in outflows on 02/26. He predicts there will be another large amount of capital withdrawn from Bit ETFs today. Since the US election in November 2023, the total net purchases of ETFs have decreased by $2.5 billion.
Statistics on inflow/outflow of Bit ETFs. Source: Farside Investors (03/01/2025)
Some experts argue that the withdrawal of capital from ETFs does not significantly impact the price, as it may only reflect the closing of carry trade transactions.
Carry trade is a strategy where investors borrow Bit at a low price, buy through ETFs, and sell at a higher price, often accompanied by hedging positions. However, Kendrick believes the scale of these transactions is not large enough to explain the strong capital outflow from ETFs.
Instead, he points out that hedge funds are increasing their Short positions, indicating that institutional investors are betting on a decline in Bit in the coming period.
Data from the Commodity Futures Trading Commission (CFTC) reflects:
Hedge funds' Short positions have increased from $7.9 billion to $11.3 billion since the US election (as of 02/18).
The amount of Bit held through ETFs has increased from $23.5 billion to $40.2 billion before decreasing to $37 billion recently.
Kendrick also points out that CFTC data only represents Short positions on futures contracts on exchanges, so a more objective view is to look at the growth rate:
ETF positions have increased by 71% since 11/05.
Hedge funds' Short positions according to CFTC data have increased by 43%.
These figures show that ETF investors are still predominantly in Long positions, making them more vulnerable to panic selling if Bit declines significantly. Kendrick warns that in the case where this capital is mainly from retail investors, the risk of a strong sell-off is entirely possible. He emphasizes:
"Watch the capital outflow from ETFs today, as it will most clearly reflect the market sentiment."
Bit may experience more volatility, but also presents a buying opportunity?
When asked about the outlook for Bit's price in the coming period, Kendrick believes the key question now is whether Bit can recover or will continue to face downward pressure. One of the important factors impacting the market is Trump's economic policy, particularly his recent statements about raising tariffs.
He compares the current situation to August 2024, when Bit plummeted from $70,000 USD to $50,000 USD in just one week. If this scenario repeats, Bit could decline an additional 5.5% from the current level, reaching the $69,000 - $76,500 USD range.
However, this price level could be a good buying opportunity if the market stabilizes. Kendrick affirms:
"If Bit falls to $69,000 - $76,500 USD, that will be a price level I would want to buy in."
Compiled by Coin68
