The largest cryptocurrency by market capitalization, Bitcoin is often at the center of controversy and discussion. Because of such geopolitical tensions, its price fluctuations have increasingly been tied to global events. And very recently, Head of Digital Assets Research at Standard Chartered, Geoff Kendrick, made an important forecast on an important support level—should Bitcoin slide below the said level of $60,000—critical at the moment because of fears of geopolitical risks that are currently unfolding.
But what does this say for Bitcoin’s future, and how should investors deal with this space of uncertainty? Let us then examine the factors that have shaped Bitcoin’s behavior in the markets and which events could mark its outcome in the near months.
The Fragility of Bitcoin’s $60,000 Support Level
“Risk concerns related to the Middle East seem destined to push Bitcoin below $60,000.” – Twitter
The $60,000 support has been a psychological and technical barrier during the past few months of 2024. For many traders, the support level at $60,000 acts as a strong price floor, and if it breaks down, further downward momentum may continue. However, what is necessary to be understood is that such fragility does not sprout from within Bitcoin’s internal market dynamics but from the geopolitical impacts that triggered anxiety in the financial markets.
In his recent analysis, Kendrick noted that though the currency has shown resilience in the past, it is now more exacerbated by increasing global tensions, especially in the Middle East. Specifically, Iran’s recent offensive against Israel created waves of uncertainty not just for traditional markets but also for the crypto space. One can now see that the relationship between Bitcoin and other risk assets like stocks continues to rise and that cryptocurrency is probably not the haven it promised; it is rather considered a safe asset in bad times, many think.
Question About Bitcoin as a Safe Haven
Safe havens can be defined in comparison to traditional assets such as gold. When the geopolitical or economic outlook is turbulent, investors flee towards such assets to maintain their wealth when the markets become chaotic. The persistent minting of Bitcoin as “digital gold” has been rather useless in assuming the role it was meant for. According to Kendrick, such is not how things are going in today’s political playground.
The fact that such a disaster happened recently in the stock market and in cryptocurrencies as well reminds one of the ways Bitcoin is treated as more of a risk asset as opposed to most others. Investors sell assets like Bitcoin when they become fearful about uncertainty in markets, preferring to stay with more stable assets for the time being.
Such an assertion by Kendrick on Bitcoin being “due” to break beneath $60,000 support appears to reflect greater concern, as geopolitical risks are poised to significantly weigh against its price. While the long-term outlook for Bitcoin has been relatively robust, the short-term outlook may become quite daunting in today’s global climate.
Buying Opportunity Amid Market Volatility
Conceding that not even the most enthusiastic proponent of Bitcoin can be happy with the grim short-term price action, Kendrick sees a silver lining. In his opinion, any decline will represent a buying opportunity. Every asset’s price drop can create more attractive entry points for long-term investors. Kendrick indicates a position like Bitcoin’s shouldn’t scare investors away from looking at the bigger picture.
The significant reason for his optimism is the increasing activity in Bitcoin options markets. More specifically, he has observed that the demand for call options is increasing. For those who may not know what it refers to, this is a financial contract that gives the buyer the right to buy an asset at a particular price before a certain date, dubbed the expiration. Regarding Bitcoins, he has particularly observed that individuals have been interested in call options where the price is pegged at $80,000 and it is to expire in December. All these factors point out that most market players expect a reversed trend of the BTC price in the near future.
The flow of long positions with call option positions indirectly also indicates positive medium-term sentiment in the market. Traders, who bet on Bitcoin future growth, are perhaps trying to position themselves for some triggers that might push the cryptocurrency higher up.
The Expected Influence of US Presidential Elections
What is perhaps most interesting about Kendrick’s analysis is his musings concerning a potential relationship between the price of Bitcoin and the presidential election in 2024. While geopolitical concerns have colored the near-term perspective of Bitcoin, the election creates another layer of complexity to that price movement.
There is a curious “circularity” between Bitcoin and the U.S. presidential elections, especially in terms of possibilities for Donald Trump to win against Kamala Harris. In fact, the decentralized prediction market Polymarket now claims that Trump has taken the lead over Harris, at least within the voting odds, although the margin is pretty slim. This newfound tipping in probabilities may resoundingly be imperative for Bitcoin’s future path in price, says Kendrick.
How a Trump Victory Could Impact Bitcoin?
As a whole, most analysts view a probable Trump victory as bullish for Bitcoin and the entire crypto market. In fact, Trump himself became more interested in crypto over the last few years, visiting the largest industry conference, Bitcoin 2024, where he praised decentralized finance (DeFi) importance. Another important announcement was his participation in a project called “World Liberty,” which should contribute to the development of free, decentralized financial systems.
If Trump is to be elected as president, then Kendrick and the others think his administration would hasten the integration of pro-crypto policies. This could include better regulatory frameworks for digital assets, tax incentives for blockchain-based businesses, and promoting initiatives for DeFi. This presents a bright prospect for Bitcoin as it moves into a better regulatory environment that may take it to new heights.
In fact, Standard Chartered previous research had given a very bold end-year price target to Bitcoin at $220,000 based on a Trump presidency. This would be under the assumption that Trump would withdraw all the regulatory barriers to the current barriers and hindrances, allowing the crypto industry to open the sector to more institutional adoption.
If Kamala Harris Elected Ends
While victory may be bullish for Bitcoin from the perspective of Trump, a Harris presidency may call for an altogether different script. Kamala Harris, the current Vice President of the United States, has also turned out to be an advocate of digital assets. Recently, she came out in public support of cryptocurrencies as being part of the future of the global financial system.
His analysis does, however, suggest that an initial price drop of the bitcoin on a Harris win would not automatically signal long-term doom for this cryptocurrency. Indeed, he writes that the market would more than likely bounce back at the realization that progress in the regulatory front would still continue under Harris’s leadership; Harris’s rule would likely focus on putting together a clear and well-defined regulatory framework for digital assets—whatever could be seen as beneficial by the industry end.
Under a Harris administration, Standard Chartered is setting increasingly conservative targets for Bitcoin to reach $75,000 by year-end. Although this is much below what is estimated in the Trump scenario, it still would represent upside for investors in general who view Bitcoin as a long-term investment.
Options and Market Sentiment
A recent factor that influences the attitude towards price is an ascending open interest in Bitcoin call options. Call options are those options for clients that give them, but do not bind them, permission to purchase BTC at a set price by a definite date or period. Growth in interest in these options, especially those options for $80,000 strike price expiring in December, displays strong mid-term bullish sentiment among traders.
At this stage, Kendrick points out that the increasing call option positions reflect the increased confidence in Bitcoin’s ability to come out of this particular drop. The numbers indicate that many traders believe that Bitcoin will be trading quite a number of miles beyond the levels at present within months.
With this increasing demand for the call options, there is additional positivity to the market. Though geopolitical tensions and election uncertainties will weigh on currency in the short term, positive sentiment reflected in the options market indicates that traders are positioning themselves for a rebound in price later this year.
Catalysts for Q4 Rally
Despite how difficult it is going to be for Bitcoin in the short term, many analysts believe that the cryptocurrency is still poised for a major rally in Q4 of 2024. Some catalysts can work to make sure the cryptocurrency is something where some positive action needs to take place on a brighter scale, especially in Q4 of 2024.
More institutional adoption: More use of the coin could be seen as more institutions investigate blockchain technology and digital assets. Interest in cryptocurrencies, especially among major players, has been increasing steadily, with some major players like BlackRock and Fidelity recently expressing interest in Bitcoin ETFs.
Clarity in Regulation: Whether Trump or Harris, clearer regulations around digital assets remove the lingering uncertainty that has placed significant weight on Bitcoin’s price. Such a defined regulatory framework might open doors for wider acceptance and investment.
The outcome of the presidential race in the United States could hamper Bitcoin’s direction, as a Trump win is likely to create a friendlier regulatory climate and potentially more steady progression under President Harris.
Halving Event: The upcoming halving in 2024 is going to reduce new Bitcoin supply in the market. According to past records, all the halvings have come with extreme price swings since decreasing supply generally increases demand.
Conclusion
Bitcoin’s future in 2024 is uncertain and full of opportunities. While geopolitical tensions and the U.S. presidential election are a challenge, buying opportunities can arise for the believer in the long-term value. Geoff Kendrick of Standard Chartered emphasized that these dynamics must be navigated with acute care, taking into consideration at the same time both short-term risks and medium- to long-term potential. It’s a highly dynamic and absolutely volatile asset, yet still, the market is in evolution, and Bitcoin has its potential, which will gain much through the foreseeable months.
