Bitcoin has fallen more than 15% this week, briefly approaching $61,000. Despite weakening market sentiment, Standard Chartered Bank maintained its year-end Bitcoin price target of $100,000, stating that the sell-off may be nearing its end.
In a report to clients, Geoffrey Kendrick, Head of Digital Asset Research at Standard Chartered, stated that the recent pullback was primarily driven by outflows from US spot Bitcoin ETFs, forced liquidation of leveraged positions, and concerns stemming from Strategy's recent Bitcoin sales. However, at the time of the report's release, Bitcoin had already rebounded from its intraday low, returning to around $60,000.
Strategy or Resumption of Buying
One reason Standard Chartered maintains a bullish outlook is that Strategy has historically re-entered the market after selling Bitcoin.
Earlier this week, Strategy disclosed the sale of 32 bitcoins, worth approximately $2.5 million, to fulfill its preferred stock distribution obligations. This transaction has attracted attention because the company has a long history of consistently accumulating bitcoin holdings.
Kendrick points out that Strategy also sold Bitcoin in 2022, but quickly increased its holdings afterward. Based on this history, he expects the company may resume a relatively aggressive buying pace. Standard Chartered believes that the market's reaction to this sale may have amplified its actual impact.
ETF fund flows remain resilient
Standard Chartered also noted that overall fund flows into US spot Bitcoin ETFs have not shown a significant slowdown. According to Kendrick, since the product's launch, cumulative net inflows remain at approximately $54.2 billion.
- Cumulative net inflow of approximately US$54.2 billion
- Holdings decreased from approximately 682,000 BTC to 674,000 BTC.
- Bitcoin briefly fell to $61,000.
Although related positions have fallen from their highs, the bank believes the overall trend remains relatively stable. This is one of the key reasons why it did not lower its target price.
The scale of the liquidation has not been extreme.
In addition to spot ETFs and corporate buying, Standard Chartered also considers changes in derivatives positions as another indicator of whether the market is overly pessimistic.
The bank stated that approximately $1.5 billion in leveraged Bitcoin futures positions were liquidated during the recent sell-off. Kendrick noted that this amount is similar to previous normal pullbacks, but still lower than the liquidation levels seen during some severe crashes.
Standard Chartered's recent optimistic outlook isn't limited to Bitcoin. Last week, the bank compared Ethereum's current weakness to Amazon's experience after the dot-com bubble burst, arguing that token prices don't always reflect the network's actual development. The bank currently maintains its target of Ethereum reaching $4,000 by the end of 2026 and $40,000 by 2030.
