Warning: 'BTC may fall below $90,000'! Standard Chartered analyst reveals 'key support level'

BTC approached the much-anticipated $100,000 mark last week, but fell short at the last moment, followed by consecutive days of decline. In the early hours of today (27th), it briefly fell below $91,000. According to analysis by Standard Chartered, this pullback in BTC may not be over yet, and it may further drop below $90,000. Surprisingly, the trigger is the nomination of the US Treasury Secretary.

The nomination of the Treasury Secretary shocks the market, and BTC is under short-term pressure

Standard Chartered’s digital asset research director Geoff Kendrick pointed out in Tuesday’s analysis that the recent correction pressure on BTC mainly comes from the appointment of the US Treasury Secretary. He pointed out:

The main reason for the decline in BTC is the market’s downward adjustment of the term premium on US government bonds after Scott Bessent was nominated for Secretary of the Treasury.

‘Term premium’ is the additional return that investors demand for bearing the risk of long-term government bonds, reflecting the market’s expectations of future economic risks. As the term premium declines, the yield on long-term US government bonds falls, and market confidence improves.

After Donald Trump, the elected President of the United States, nominated hedge fund manager Scott Bessent as Treasury Secretary, the US Treasury market immediately responded, with yields on 5 to 30-year bonds falling more than 10 basis points.

Geoff Kendrick believes that this wave of bond market rebound has directly impacted the attractiveness of BTC, leading to the difficulty of maintaining an upward trend in the short term. He explained:

One of the main uses of BTC is to counter the instability of TradFi, whether it is the risk of the banking system or the problems in the government bond market. However, with the decline in term premium, market confidence in US bonds will rise, and the demand for BTC will naturally be suppressed in the short term.

Options Settlement exacerbates short-term Fluctuation

In addition to the changes in the US Treasury market, another key factor that has put pressure on BTC recently is the upcoming monthly options settlement due on Friday.

Geoff Kendrick quoted Deribit’s data showing that currently the options contracts that have not been closed position have as many as 18,000 BTC, with the exercise price concentrated in the range of $85,000 to $100,000, forming a “suppression zone” of price fluctuation. He said:

Before the expiration of the options, the price of BTC is usually suppressed, causing the trend to stagnate in the short term.

Where is the key support level?

However, Geoff Kendrick pointed out that the recent strong institutional demand has provided important support for BTC. Since the end of the US election, BTCSpot ETF has accumulated purchases of about 77,000 BTC, and MicroStrategy has increased its purchases by 134,000 BTC. He pointed out:

MicroStrategy’s buying pace shows no signs of slowing down, and it is unlikely to sell these BTC.

Geoff Kendrick emphasized that since the US election, the average purchase price of BTCSpot ETF and MicroStrategy is about $88,700, which may provide short-term support for BTC.

BTC may consolidate in the range of $85,000 to $88,700 in the short term, preparing for the next wave of upward momentum.

The long-term trend remains optimistic

Although under short-term pressure, Geoff Kendrick remains confident in the long-term trend of Bitcoin. He reiterated his year-end target price for BTC at $125,000 and predicted that by the end of 2025, BTC is expected to approach $200,000.

“Warning: ‘BTC may fall below $90,000’! Standard Chartered analysts reveal the ‘key support level’” This article was first published on ‘Blockcast’.