Analyst's Strategy for Bitcoin Investment
Standard Chartered’s Head of Digital-Asset Research, Geoffrey Kendrick, has recommended that investors accumulate Bitcoin in stages. He suggested on Wednesday that the cryptocurrency might have already experienced its final dip below the $100,000 mark.
In a note, Kendrick outlined a phased buying plan that is based on two key technical indicators: a weekly closing price above $103,000 and a recovery of the Bitcoin-to-gold ratio exceeding 30.
Kendrick elaborated on his proposed strategy: "Pre-U.S. cash open today (Nov 5) with BTC around 102,400, a reasonable strategy is: buy 25% of your maximum now … buy 25% more if Friday’s close is above 103k, and the remaining 50% once the Bitcoin-gold ratio rises back above 30."
He stressed that the recent overnight dip below $100,000 "well may be the last one ever," advocating for a "buy-the-dip, in stages" approach. Kendrick's analysis heavily relies on the 50-week moving average, which is currently positioned near $103,000, and the 200-week average, situated around $55,000.
According to Kendrick, a weekly closing price above the 50-week moving average would serve as confirmation of sustained long-term momentum for Bitcoin.
Technical Indicators and Market Factors
Accompanying charts illustrate Bitcoin consolidating above $100,000, while the Bitcoin-to-gold ratio is trading near 25.8, which is below Kendrick’s preferred threshold of 30.
Kendrick further noted that renewed inflows into Bitcoin exchange-traded funds, coupled with capital shifting away from gold ETFs, would provide additional validation for a positive outlook.
The analyst's optimistic view is also influenced by the easing of geopolitical tensions between the United States and China. Developments such as a reported agreement to suspend rare-earth export controls and an increase in agricultural trade have, in his view, restored market confidence following the sell-off experienced in October.
Additionally, Kendrick anticipates that the Federal Reserve's upcoming 25-basis-point rate cut and potential changes in Fed leadership will act as positive catalysts for Bitcoin.
Kendrick concluded with a strong statement: "If this week goes well, Bitcoin may never go below 100k again."