Bitcoin’s steep selloff may have finally run its course, according to Geoffrey Kendrick, head of digital asset research at Standard Chartered, who argues the pullback is following a familiar pattern and is likely near exhaustion.
Bitcoin It plunged below $90,000 on Tuesday, extending a drawdown that erased nearly 30% from the all-time high of $126,000 set in early October. The latest leg lower marked the deepest pullback since Bitcoin’s introduction last year in the US, and sparked debate about whether the largest cryptocurrency is entering the bear market phase of the usual four-year cycle.
“I see the recent selloff as nothing more than (a quick/painful version of) the third over the last few years, of almost exactly the same magnitude,” Kendrick wrote in a Tuesday note to clients.
As part of his thesis, Kendrick highlighted key sentiment and valuation metrics that have now reset to historical levels associated with market bottoms. One of these is Bitcoin Treasury Firm Strategy’s (MSTR) adjusted net asset value (MNAV) – a measure of the firm’s Bitcoin holdings relative to its share price – which fell flat at 1.0.
“A number of other metrics have collapsed to absolute zero levels,” he said, suggesting seller fatigue and capitulation. “This is enough to define the Sell-Off is over.”
“A rally at the end of the year is my base case,” he concluded.
His view has been shouted recently Comment from analysts at Crypto Exchange Bitfinex. They noted that the speed with which short-term holders realized losses began to slow with onchain capitulation signals emerging, usually markers of a market bottom forming.
BTC bounced just shy of $93,000 on Tuesday, up 3.8% from overnight lows.
