In an investor note shared with CryptoSlate on October 3, Standard Chartered said it believes Bitcoin (BTC)’s decline below the $60,000 level is “normal” and that the recent He said the decline is a buying opportunity.
Jeffrey Kendrick, the firm’s global head of digital asset research, said Bitcoin is currently trading in an “interesting cycle” where geopolitical tensions are pushing prices down, while former Donald Trump It is said that the increased probability of the president winning the election is boosting the economy after the election. Bitcoin outlook.
According to Kendrick,
“BTC looks destined to drop below 60,000 by the end of the week due to risk concerns related to the Middle East.Positions like the 80,000 call option highlighted here and cyclicality compared to Trump’s potential. It suggests that the push should be accepted.”
Not a geopolitical hedge
Kendrick said Bitcoin, unlike traditional assets such as gold, does not act as a safe haven against geopolitical concerns and can perform similarly to stocks during periods of stress and uncertainty. He emphasized that he is continuing.
Instead, Bitcoin has served as a hedge against systemic financial risks, such as the sustainability of the U.S. Treasury and bank failures like the one seen at Silicon Valley Bank in March. He noted that BTC’s response to geopolitical issues has been consistent, even as market volatility increases due to uncertainty surrounding the ongoing crisis.
Kendrick cited a May report from Standard Chartered that described digital assets as an extension of the technology sector. Therefore, BTC can also act as a hedge in scenarios where the traditional financial system becomes unstable, such as bank failures, dollar stripping, and issues related to U.S. debt.
However, Bitcoin still falls short of gold’s role as a safe-haven asset during times of heightened political risk, such as the current situation in the Middle East.
Changes in election probability
One interesting insight from Kendrick’s analysis is the impact of the US presidential election on Bitcoin price movements.
Former President Donald Trump’s odds of winning the 2024 presidential election have increased by 1% over the past week, while Vice President Kamala Harris’ odds have fallen by 1%, making the race effectively 50-50, according to Polymarket data. It was a minute.
Kendrick notes that while geopolitical concerns are weighing on Bitcoin prices, there is a strange market dynamic in which the increased probability of Trump’s election could boost Bitcoin’s chances post-election. pointed out. Given President Trump’s positive stance on the U.S. crypto industry, Kendrick believes a Republican victory would be bullish for Bitcoin.
Expanding options
Kendrick further emphasized the connection between market sentiment and positioning, highlighting the surge in Bitcoin options trading on Deribit.
As the chart attached to his note shows, open interest in options with a strike price of $80,000 expiring on December 27th has increased by 1,300 BTC over the past two days. This surge in open interest suggests that investors are bracing for a possible recovery in BTC prices by the end of the year.
Despite the short-term risks, Kendrick suggested that a drop below $60,000 could represent a buying opportunity for those betting on a medium-term rebound. The interaction of geopolitical concerns and the US election is expected to remain a major driver of Bitcoin volatility over the coming weeks.
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