Standard Chartered has issued a warning that Bitcoin (BTC) could drop further over the weekend, potentially falling to a range between $69,000 and $76,500. The caution comes as Bitcoin continues its streak of red weekends, driven by ETF outflows and mounting hedge fund short positions.
ETF Outflows and Hedge Fund Shorts Fuel Bearish Sentiment
According to Geoffrey Kendrick, head of digital asset research at Standard Chartered, the digital asset market is facing ongoing downside risks, exacerbated by ETF-related selling pressure.
“It is at the end of weeks like this that digital asset participants wish the asset class closed for the weekend.”
Kendrick highlighted the significance of Bitcoin’s drop below $80,000, which was previously a key support level following Donald Trump’s election victory. He noted that this breach raises concerns about the depth of the ongoing sell-off.
Bitcoin ETFs have seen outflows nearing $1 billion as of February 25, a key threshold signaling further potential losses. Despite this, Kendrick believes sell pressure is not yet exhausted.
Additionally, hedge fund short positions have been growing, further intensifying market uncertainty. Kendrick observed a clear disconnect between ETF positioning and hedge fund exposure, citing CFTC data:
- ETF positions surged from $23.5 billion to $40.2 billion, now reduced to $37 billion.
- Hedge fund shorts rose from $7.9 billion to $11.3 billion as of February 18.
“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 Add to Market Jitters
Kendrick also warned that Bitcoin has breached a key convexity risk level of $90,000, reinforcing his bearish stance. He emphasized that Bitcoin is now caught in a broader risk-off sentiment alongside traditional financial markets.
While lower U.S. Treasury yields might provide long-term support, Kendrick cautioned against premature dip-buying, suggesting that the market needs to see a more decisive correction first.
Weekend Outlook: Will Bitcoin Face Another August-Style Decline?
Looking ahead to the weekend, Kendrick expressed skepticism about a recovery, citing looming geopolitical tensions and trade tariffs. He questioned whether risk assets would stage a rally under such conditions:
“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 triggered a 5.5% drop, pushing Bitcoin below $50,000, Kendrick warned that a repeat scenario could send BTC into the $69,000 to $76,500 range.
With ETF outflows accelerating, hedge fund short positions growing, and geopolitical risks looming, Standard Chartered sees continued downside risks for Bitcoin over the weekend. If historical patterns hold, another sharp sell-off akin to August 2024 could push BTC toward lower support levels, leaving traders on high alert for further volatility.
