- Bitcoin has fallen below $88,000 for the first time since November.
- Standard Chartered says things will get worse yet.
Bitcoin slumped 9% on Tuesday to trade below $88,000 for the first time in 2025.
The price slump has set off the usual siren call of “buy the dip” but some market analysts say investors shouldn’t take the bait, at least not yet.
“Do not buy the dip yet,” Geoffrey Kendrick, global head of digital assets research at UK bank Standard Chartered, wrote in a Tuesday note.
Kendrick warned that Bitcoin may not have bottomed yet and that a move to the “low 80s” was likely.
Bitcoin traded at $89,400 as of reporting time.
Market observers like BitMEX co-founder Arthur Hayes have even predicted Bitcoin could fall to as low as $70,000.
For investors who want to time the market, Kendrick said Bitcoin’s exchange-traded fund flows may offer some clues.
“Before buying the dip is attractive, I think we get a $1 billion ETF outflow day,” Kendrick said in the note.
Bitcoin ETF’s worst day of outflows was on December 20 when it saw $680 million in outflows. The outflows were triggered by Federal Reserve Chair Jerome Powell indicating a slowdown in the interest rate-cutting schedule.
Investors have withdrawn over $1 billion from Bitcoin ETFs in the last trading week, with half of that sum happening on Monday.
With Bitcoin below $90,000, most ETF buyers are papering significant losses. That’s because the majority of Bitcoin ETF investors since November bought shares of the various funds at an average Bitcoin price of $96,500, according to Kendrick.
Bitcoin’s falling price can force institutional players to rebalance and adjust their holdings, which in turn causes a snowball effect that drives further price declines.
Market observers say the lack of a new narrative to spur investor interest in Bitcoin and cryptocurrencies is also causing the market slump.
Last week, JPMorgan analyst Nikolaos Panigirtzoglou said cryptocurrencies faced a weak demand from both retail and institutional buyers.
The report said institutional investors were taking profits or cutting their losses in the absence of a new narrative to spur market growth.
However, Bitcoin’s long-term attractiveness “remains solid,” according to Anthony Georgiades, founder and general partner at crypto venture fund Innovating Capital.
Standard Chartered analysts have previously predicted Bitcoin could reach $200,000 this year and $500,000 by the end of US President Donald Trump’s second term.
Still, investors may be in for some short-term pain.
“Fed policy and broader market conditions will likely play a role in Bitcoin’s price action, at least in the short term,” Georgiades told DL News.
Crypto market movers
- Bitcoin has slumpted 7% over the past 24 hours to reach $89,056.
- Ethereum has plummeted over the same period to trade at $2,426.
What we’re reading
Osato Avan-Nomayo is our Nigeria-based DeFi correspondent. He covers DeFi and tech. Got a tip? please contact him at osato@dlnews.com.
