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The weeks of Bitcoin's price decline are unlikely to witness a rebound, hamstrung by a lack of near-term bullish momentum in a market defined by retail investors with overbought positions, market watchers said Friday.
The prices could dip further to as low as $50,000 (68 million won), according to a number of global investment banking powerhouses, as indicated by continued outflows of Bitcoin exchange-traded funds (ETFs).
According to CoinMarketCap, a cryptocurrency data provider, Bitcoin traded at $59,562, Friday noon, and was yet to recover after breaching the $60,000 barrier, Wendesay.
The digital coin fell over 10 percent in April, from a peak of $71,618 on April 8.
The virtual asset faces a potential further decline to $50,000, according to Geoffrey Kendrick, head of forex and digital assets research at Standard Chartered Bank.
The grim assessment is notable since the global banking firm was one of many cheerers of the Bitcoin craze. It had projected that the price would spike to $150,000 and even $250,000 in 2024 and 2025, respectively.
The analyst said the recent drop below the $60,000 mark could be the "beginning of more significant losses in the near future," adding that it "opens the path for a potential decline to the $50,000 to $52,000 range."
Major factors at play include the five consecutive days of outflows from U.S. spot Bitcoin ETFs, lackluster response to the much-anticipated launch of spot Bitcoin and ether ETFs in Hong Kong and subsequent elevated risk of liquidation.
China AMC, a Chinese asset manager, said on April 15 that it had received regulatory approval for the provision of "virtual asset management services."
It reportedly was actively deploying resources in the development of a spot bitcoin and ether ETF but this has led to little enthusiasm.
"The outflows from U.S. spot Bitcoin ETFs, as well as the below-$58,000 level, means a higher risk of liquidation for some ETF positions," he said. More than half of the spot ETF positions are at risk, fueling the potential for liquidation.
Tightening liquidity conditions in the United States since April, he added, has put downward pressure on cryptocurrencies and risk-on assets.
Similarly, JPMorgan Chase, a global financial service powerhouse, said no immediate growth momentum will lead to further tanking of the virtual asset.
More retail investors are seeking an exit, as evidenced by the recent sell-offs in both spot and equity assets last month.
"With the retail impulse dissipating and with the three headwinds mentioned previously in our publication still in place, we maintain a cautious stance on crypto markets over the near term," JPMorgan analysts, led by Nikolaos Panigirtzoglou, wrote in a report on Thursday (local time).
The three are elevated positioning, high bitcoin prices compared to gold and the estimated bitcoin production cost as well as subdued crypto venture capital funding.