The recent selloff in Bitcoin, triggered by overblown expectations for Trump’s crypto policies and a correction in the Nasdaq, has analysts suggesting it might be a prime opportunity to buy the dip. Geoffrey Kendrick of Standard Chartered and analysts from LondonCryptoClub weigh in on the situation.
Market Reaction and Analysis
Geoffrey Kendrick, global head of digital asset research at Standard Chartered, attributes the recent crypto selloff to inflated hopes for Trump’s crypto actions and a broader market correction led by the Nasdaq. Despite Bitcoin trading below $100,000, down over 4% in the past 24 hours, Kendrick believes the worst may be over.
LondonCryptoClub analysts echo this sentiment, describing the decline as a knee-jerk reaction within a broader bull market supported by strong macro fundamentals. They view the selloff as a local low, suggesting that the market’s fundamentals remain constructive.
Bitcoin’s Price Movements
Bitcoin experienced a sharp decline, sliding from a high of $105,000 on Sunday to below $98,000 before rebounding to just under $100,000. This volatility has led some analysts to warn of a potential deeper pullback. However, Kendrick remains optimistic, advising investors to “buy the dip” in his Monday morning report.
Kendrick had previously warned of a potential 10%-20% correction due to overzealous market expectations for Trump’s crypto executive order and strategic reserve. He argues that the overnight selloff likely addressed much of this overpricing.
Broader Market Influences
The selloff coincided with a significant decline in the Nasdaq, which was down 3%, led by a 15% drop in Nvidia (NVDA) shares. The tech stock plunge was driven by DeepSeek’s more efficient artificial intelligence model, which caused panic in the crypto market.
Despite the short-term pain, Kendrick notes the rapid decline in U.S. Treasury yields, with the 10-year note yield nearing 4.5%, as a signal that much of the downward move is complete. He suggests that while there may be more volatility ahead, particularly with big tech companies reporting earnings and the Federal Reserve’s January meeting, the overall market outlook remains positive.
Future Prospects
Although there may not be an immediate price boost from the Trump administration’s digital asset actions, Kendrick believes the benefits will ripple through the sector in the coming weeks and months, driven by increased institutional asset flows.
LondonCryptoClub analysts also see the selloff as a temporary reaction to a headline event. They advise caution, noting that broad derisking can be mechanical and indiscriminate. However, they maintain that the market remains a “buy the dip” environment, with strong macro fundamentals supporting a bullish trend.
At the time of writing, Bitcoin is trading at $99,800, down over 4% in the past 24 hours. The tech-heavy Nasdaq 100 is also down 3%, led by a significant decline in Nvidia shares.
