Normal Chartered warned that Bitcoin (BTC) may slip from $69,000 to $76,500 over the following two days, doubtlessly persevering with its current pink weekend profitable streak.

The draw back danger is pushed by steady ETF outflows and the set up of quick positions in hedge funds, in response to Jeffrey Kendrick, head of lender digital belongings analysis.

ETF spills and hedge fund shorts

Kendrick detailed rising considerations about current weaknesses available in the market, lamenting that there is no such thing as a prolonged break loved by different markets.

He stated:

“On the finish of those few weeks, digital asset individuals hope that their asset lessons might be closed over the weekend.”

He added that the decline in Bitcoin, under the primary resistance degree of $80,000 after Bitcoin’s election victory, raises questions on how far the sale will go.

Kendrick’s evaluation pointed to necessary ETF exercise as a precursor to additional decline. He identified that the Bitcoin ETF leak touched nearly $1 billion on February twenty fifth. He stated this is a crucial threshold. Regardless of the huge spill, Kendrick believes the promoting strain will not be over.

He additionally highlighted a rise in disconnection between ETF positioning and quick exposures of hedge funds, primarily based on CFTC information.

Kendrick noticed that because the US election, ETF positions have skyrocketed from $23.5 billion to $40.2 billion (now $37 billion), whereas the hedge fund quick tales have risen from $7.9 billion to $11.3 billion from February 18th.

Kendrick identified:

“ETF positions have grown by 71% since November fifth, whereas hedge fund shorts have solely elevated by 43%. Because of this ETFs nonetheless have lots of (the bulk) full size. I believe there’s a danger of panic gross sales to the extent that it stems from these underlying retail streams.”

Geopolitical and regulatory uncertainties

Kendrick revisited his earlier consideration on minus-side danger and warned that the numerous convex danger degree of $90,000 Bitcoin has been violated.

He stated early within the week:

“BTC is buying and selling comparatively nicely throughout the digital asset complicated, however is now caught up in a wider vary of risk-off feelings.”

Kendrick added that even supposing it stays short-term sentiment, the US Treasury yield may present long-term help regardless of being warned in opposition to buying DIP earlier than a extra definitive DIP.

Trying ahead to the weekend, Kendrick expressed his skepticism that the approaching geopolitical tensions and dangerous belongings given the implementation of tariffs could be rallying.

He stated:

“It is most likely honest to imagine that there was Trump’s tariff noise… however will dangerous belongings actually collect over the weekend? I doubt that.”

Bear in mind an analogous interval in August 2024 – when the panic sale pushed Bitcoin to beneath $50,000 after a fast 5.5% decline – he identified that one other decline of an analogous dimension could be seen sliding Bitcoin into the $69,000-$76,500 vary.

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