Bitcoin Needs Sovereign Buying or Macro Clarity to End Risk-Off Sentiment for Breakout – Standard Chartered

Standard Chartered head of digital asset research Geoffrey Kendrick believes Bitcoin‘s (BTC) current price action suggests that the flagship cryptocurrency may require sovereign accumulation or improved geopolitical clarity to push higher amid the prevailing risk-off market sentiment.

In a March 11 research note shared with CryptoSlate, Kendrick highlighted that Bitcoin’s recent decline has brought price levels near its trading range from November 6, 2024, the day after the US presidential election.

BTC hit a four-month low of $76,500 on March 10 before attempting a recovery above $80,000, while its 30-day implied volatility hovered around 55%.

Kendrick noted that Bitcoin has fallen in tandem with major US tech stocks as risk assets continue to struggle against rising macroeconomic concerns.

Kendrick compared Bitcoin’s recent performance to that of the so-called “Magnificent 7” tech stocks, which include Apple, Microsoft, Nvidia, Alphabet, Meta, Tesla, and Amazon. These shares have also seen sell-offs amid market uncertainty.

Since the inauguration of the current US administration, Bitcoin has tracked these shares on a volatility-adjusted basis, reinforcing the argument that broader risk asset sentiment is a key driver of price actions.

Tesla, Meta, and Apple have been the closest equity counterparts to Bitcoin in terms of adjusted performance, he noted. The data suggests that Bitcoin’s price action is more reflective of widespread risk-off sentiment rather than asset-specific challenges.

Kendrick noted that Bitcoin continues to face additional downside risk in the short term due to macro uncertainties and needs a major catalyst to renew its uptrend.

He wrote:

“The question now is which comes first: a recovery in risk assets or positive Bitcoin-specific information, such as sovereign buying from the US or other countries.”

The prospect of Federal Reserve rate cuts remains critical. A faster-than-expected shift in policy, potentially at the Fed’s May meeting, could stabilize risk markets. Current market expectations for a May rate cut have risen from 50% to 75%, increasing the probability of a policy shift that could benefit Bitcoin.

In the near term, Kendrick stated Bitcoin may fall beneath the November 6 price range, indicating the potential for further downside. Nevertheless, he reaffirmed his long-term bullish stance, maintaining his previous target of $200,000 by 2025 and $250,000 by 2026.

He argued that recent volatility reinforces the case for future Fed rate cuts, which may act as a tailwind for Bitcoin.

Kendrick suggested investors to “stay nimble” and reaffirmed his broader thesis that Bitcoin’s long-term trajectory remains intact despite short-term turbulence.

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