Foreign media: Standard Chartered Bank believes this round of decline in crypto assets may be nearing its end. Geoff Kendrick, Head of Digital Assets Research at the bank, stated in his latest analysis that Bitcoin’s previous drop to around $59,000 may have marked the bottom of this market cycle; whether the market can sustain a recovery will depend on whether oil prices, ETF fund flows, and institutional buying simultaneously improve.
Bitcoin shows signs of bottoming out after rebounding
Kendrick stated that, following its peak of approximately $126,000 in October last year, Bitcoin experienced a maximum drawdown of 53%. In his view, this correction has released most of the pressure, suggesting that the crypto market may have already passed its weakest phase.
According to CoinGecko data, Bitcoin has recently returned above $64,000, rising approximately 5% over the past week. However, during the same period, the total market capitalization of the crypto market slightly declined from $2.29 trillion to $2.277 trillion, indicating an uneven overall recovery.
Oil prices and the situation in the Middle East are key points of observation.
This review suggests that one of the key reasons for recent market pressure is the rise in energy prices due to the Middle East conflict. Higher oil prices have pushed up U.S. Treasury yields, reducing the appeal of risk assets such as cryptocurrencies.
Kendrick noted that if the United States and Iran reach some form of de-escalation agreement, it could lead to further declines in oil prices, thereby easing pressure on risk assets. Data shows that WTI crude fell 1.5% on Friday to $86 per barrel.
ETF fund flows are still pending confirmation.
Kendrick also views Bitcoin spot ETF fund flows as a key indicator. He noted that these products have experienced one of the most significant selling periods since their inception in recent weeks. According to CoinGlass data, Bitcoin ETFs have seen net outflows of approximately $5 billion since mid-May.
He believes that some of the funds outflow may be related to the market reallocating cash in preparation for SpaceX’s IPO. However, this assessment remains speculative and subjective; whether the market has truly shifted will depend on whether ETF fund flows resume net inflows and whether Strategy continues to increase its Bitcoin holdings.
Additional information: Standard Chartered previously set a $100,000 target price for Bitcoin in February this year; its latest statement does not alter its overall bullish outlook.