- Bitcoin may be down, but analysts remain bullish.
- Trump’s presidency and central banks’ moves identified as key drivers.
“Buy the dip.”
That’s UK bank Standard Chartered’s advice after a brutal bloodbath wiped out over 6% of the crypto market’s value over the past 24 hours to $3.5 trillion.
Bitcoin plummeted 5% over the same period to $99,000. Both the market and Bitcoin have recovered slightly since.
To Geoff Kendrick, global head of digital assets research at Standard Chartered, the drop is because traders have pumped crypto prices in anticipation of what President Donald Trump will announce, not necessarily what he has announced.
“Hope is not a strategy. It can last days, not weeks. When hope dies digital asset prices will fall 10% to 20%,” Kendrick wrote in an investor note shared on Monday.
Institutional interest will help propel Bitcoin to $200,000 at the end of 2025, Kendrick said.
Traders should also look at other cryptos, Kendrick wrote.
“Just after phase two begins, in my mind, an altcoin light season will begin,” he wrote. “I say light because institutional flows will drive BTC and ETH, partly offsetting rotation into alts.”
What’s behind the drop?
The drop correlated with a 3% drop in Nasdaq futures as the market reacted to the news of Chinese startup DeepSeek demonstrating breakthrough artificial intelligence models, Kendrick wrote.
Downloads of the DeepSeek app soared, spooking investors.
The developments highlighted risks in Silicon Valley’s reliance on AI growth over the past few years.
“This relationship highlights the continued strong — and strengthening — relationship between digital assets and the tech sector,” Kendrick wrote.
Bitcoin headwinds include Trump’s softening stance towards China after threatening Beijing with high tariffs, said web3 community London Crypto Club’s weekly research note.
That seems to be off the table after he had a “very good” call with President Xi Jinping.
This has weakened the dollar, which in turn choked liquidity in the market, wrote David Brickell, head of international distribution at FRNT Financial, and former forex trader Chris Mills in the note.
The Bank of Japan hiking interest rates to their highest levels in 17 years last week also contributed to the downturn.
‘Significantly higher’
Brickell and Mills remained bullish for two reasons: Trump’s pro-industry policies, and central banks continuing to cut interest rates.
“Bitcoin and broader crypto are set to reprice significantly higher,” they said.
Trump kicked off his second term last week by moving to keep several of his campaign promises. He pardoned Silk Road founder Ross Ulbricht, and signalled potential creation of a crypto stockpile.
“This is a paradigm shift in the regulatory landscape which markets are yet to fully appreciate,” Brickell and Mills wrote.
While the Fed has hinted that it will not cut rates this week, other central banks — such as the European Central Bank — have hinted that they will.
Low interest rates tend to incentivise investment in riskier assets like equities and crypto.
Crypto market movers
- Bitcoin has dropped 3.8% in the past 24 hours to trade around $101,000.
- Ethereum is down 5.5% over the same period to $3,110.
What we’re reading
- Bitcoin falls below $100,000 as AI jitters send tech stocks plunging ― DL News
- Uh-oh! Crypto has a data problem ― Milk Road
- President Trump Declares Crypto a National Priority in Executive Order ― Unchained
- Could Celestia be the next $ETH killer? ― Milk Road
- Coinbase CEO calls for token listing overhaul after Trump and Melania coin backlash ― DL News
Eric Johansson is DL News’ News Editor. Got a tip? Email at eric@dlnews.com.