Bitcoin (BTC) and other digital assets have dropped as part of a wider macro-driven sell-off in the market and there is a risk that forced selling could lead to further weakness, investment bank Standard Chartered said in a report on Monday.
The market downturn was triggered by Federal Reserve Chairman Jerome Powell’s hawkish press conference in mid-December.
The bank noted that investors who took on bitcoin exposure after the U.S. election in November, are now “only breaking even,” and there is a risk that forced or panic selling could add to the sell-off. This includes exchange-traded fund (ETF) buyers and BTC acquirer MicroStrategy (MSTR).
“The risk of mark-to-market pain is building,” wrote Geoff Kendrick, head of digital assets research at Standard Chartered.
If the world’s largest cryptocurrency breaks below the key $90,000 level, it could retrace 10% lower to the low $80,000s the report said, and other digital assets would also likely fall.
The bank advises adding bitcoin once the retracement is over.
Standard Chartered still expects bitcoin to hit $200,000 by the end of the year, fueled by the resumption of institutional inflows under the new Trump administration.
Read more: Bitcoin Bull Tom Lee Sees BTC Reaching as High as $250K by Year-End