Standard Chartered Says Bitcoin's (BTC) Dip Below $60,000 Is "Normal," Calls Recent Downturn a Buying Opportunity

According to the lender's global head of digital assets research, Geoffrey Kendrick, Bitcoin is currently trading in an "interesting circularity" where geopolitical tensions are pushing the price down, while the increased odds of former US President Donald Trump winning the elections boost post-election prospects for Bitcoin.

Standard Chartered believes the recent dip in Bitcoin’s (BTC) price below the $60,000 level is “normal” and presenting a buying opportunity.

According to the lender’s global head of digital assets research, the BTC price movement is influenced by geopolitical tensions, which are impacting the price negatively, while the increasing likelihood of former US President Donald Trump winning the elections is boosting Bitcoin’s prospects post-election.

Standard Chartered’s digital assets research lead, Geoffrey Kendrick, shared the observation in an investor note on Monday, highlighting the interplay of various factors influencing Bitcoin’s price.

Kendrick noted that Bitcoin has not served as a geopolitical hedge, unlike traditional safe-haven assets like gold, and continues to exhibit a correlation with equities during periods of tension. Instead, the digital asset has acted as a hedge against systemic financial risks, such as the sustainability of the US Treasury and bank collapses. He added that BTC’s response to geopolitical events is evident as market volatility rises due to the unfolding crisis.

The research lead pointed to a Standard Chartered report in May, where he assessed digital assets as an extension of the tech sector. In a scenario of instability in the traditional financial system, which may include bank collapses, de-dollarization and issues related to US treasuries, BTC fares well as a hedge.

However, Bitcoin is yet to fully demonstrate the role of a safe-haven asset during periods of heightened political risk, such as the current Middle East situation.

Shifting election oddsOne of the more interesting insights from Kendrick’s analysis is the impact of the US presidential election on Bitcoin’s price movement.

Polymarket data showed that former President Donald Trump’s odds for the 2024 election improved by 1% over the past week, while Vice President Kamala Harris saw a 1% decline, effectively making the race a 50/50 contest.

Kendrick highlighted this shift in the analysis, showing how geopolitical concerns are impacting Bitcoin prices negatively, but an increase in Trump’s electoral odds seems to be boosting Bitcoin’s post-election potential. Given Trump’s positive stance toward the crypto industry in the US, a Republican win is widely considered bullish for Bitcoin.

Options surgeFurther emphasizing the link between market sentiment and positioning, Kendrick highlighted a surge in Bitcoin options activity on Deribit.

Open interest for options with a strike price of $80,000 expiring on December 27 increased by 1,300 BTC in the last two days, as shown in the chart accompanying his note. This spike in open interest suggests investors are preparing for a possible recovery in BTC prices by the end of the year.

Despite the short-term risks, Kendrick signaled that the dip below $60,000 could present a buying opportunity for those betting on a medium-term rebound. The interplay of geopolitical fears and US elections is expected to remain a key driver of Bitcoin volatility in the weeks ahead.

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