Standard Chartered's head of digital asset research, Geoff Kendrick, has declared that $59,000 is Bitcoin's cycle low, signaling that the crypto winter is over and a recovery phase is underway.
Bitcoin touched $59,375 on June 5, a steep 53% drop from the October 6 high of $126,000. Kendrick attributes the recent turbulence to accelerating outflows from US spot Bitcoin ETFs and liquidity needs ahead of the SpaceX IPO.
ETF Outflows and SpaceX IPO Drain
Data shows that since the second week of May, over $5.72 billion has exited US spot Bitcoin ETFs. Kendrick notes that some investors closed ETF positions to free up cash for the SpaceX IPO. SpaceX shares began trading on Nasdaq at around $150 and quickly surged roughly 26% above the offering price.
This shift in capital allocation created short-term liquidity pressure on Bitcoin. Kendrick expects that once the IPO process concludes, the liquidity drain will ease, allowing renewed inflows into spot ETFs and reinforcing the $59,000 level as a solid support base.
Macro Pressure Could Ease
A potential de-escalation of geopolitical tensions could also support a market rebound. Kendrick highlights G7 discussions about a possible US-Iran deal, which could curb rising oil prices. Brent crude is hovering near $87/barrel, West Texas Intermediate around $85. Lower oil prices would relieve pressure on US bond yields, creating a more favorable backdrop for crypto.
Former President Donald Trump recently suggested a deal with Iran might be possible, but later clarified on Truth Social that publicly discussed terms differ from earlier agreements.
Despite uncertainties, Kendrick reaffirmed his year-end targets and said Ethereum could outperform Bitcoin in the short term if conditions stabilize.
Three Indicators to Confirm a Bottom
Kendrick outlined three catalysts he's watching: fresh Bitcoin purchases by major funds like Strategy, a return to net positive daily inflows for US spot Bitcoin ETFs, and a sustained drop in international oil prices over the coming week.
At the time of his note, Bitcoin was trading just below $64,000.
Disclaimer: This article does not constitute investment advice. Cryptocurrencies carry high volatility and risk; readers should conduct their own research.