Standard Chartered warned that Bitcoin (BTC) could potentially slip further to between $69,000 and $76,500 over the next two days, continuing its recent streak of red weekends.
According to the lender’s head of digital asset research Geoffrey Kendrick, the downside risk is driven by continued ETF outflows and mounting hedge fund short position.
ETF outflows and hedge fund shorts
Kendrick detailed growing concerns over the market’s recent weakness and lamented the absence of extended breaks enjoyed by other markets.
He said:
“It is at the end of weeks like this that digital asset participants wish the asset class closed for the weekend.”
He added that Bitcoin’s drop below $80,000 — once a key resistance level following Trump’s election victory — raises questions about how far the sell-off might go.
Kendrick’s analysis pointed to significant ETF activity as a harbinger of further declines. He noted that Bitcoin ETF outflows almost touched $1 billion on Feb. 25, which is a critical threshold. Despite the significant outflows, Kendrick believes the sell pressure may not be over.
He also highlighted a growing disconnect between ETF positioning and hedge fund short exposure based on CFTC data.
Kendrick observed that since the US election, ETF positions surged from $23.5 billion to a peak of $40.2 billion — now down to $37.0 billion — while hedge fund shorts climbed from $7.9 billion to $11.3 billion as of Feb. 18.
Kendrick noted:
“ETF positions are up 71% since Nov. 5, but hedge fund shorts are up only 43%. This implies there is still a lot (the majority) of outright longs in the ETFs. To the degree these stem from underlying retail flow I think they remain at risk of panic selling.”
Geopolitical and regulatory uncertainty
Kendrick revisited his earlier caution regarding downside risks, warning that Bitcoin’s key convexity risk level of $90,000 had been breached.
He had said earlier in the week:
“While BTC trades relatively well within the digital asset complex, it is now caught up in the broader risk-off sentiment.”
Kendrick added that lower US Treasury yields might offer long-term support even as near-term sentiment remains bleak but cautioned against buying the dip before a more decisive dip.
Looking ahead to the weekend, Kendrick expressed skepticism that risk assets would rally given looming geopolitical tensions and tariff implementations.
He said:
“Probably fair to assume we have had the Trump tariff noise now… But are risk assets really going to rally into the weekend now we have had the bad news? I doubt it.”
Recalling a similar period in August 2024 — when panic selling pushed Bitcoin below $50,000 after a rapid 5.5% decline — he noted that another drop of similar magnitude could see Bitcoin slide into the $69,000 to $76,500 range.
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