10x Research Warns of a 20% Drop

• A research firm drops a bombshell as it anticipates another 20% fall for Bitcoin, cites the prolonged outflow from spot Bitcoin ETFs as the primary cause. 
• The research firm has linked the current bearish run to a shift in ETF buying behaviour and the $53,000/$55,000 all-in mining cost.

Bitcoin’s (BTC) surprising bloodbath continues as it plunges below $60k in an 8% weekly fall and 30% monthly decline. 

Unfortunately for active investors, the asset is expected to extend its downward trend as crypto research firm 10x Research observes underlying factors that could trigger a 20% drop to below $50k. For context, 10x Research predicted the Bitcoin low in March 2022, and the surge to $63,160 by March 2024. In addition, it accurately predicted the $45,000 by December 25, 2023, and identified the Bitcoin miner as a key investment for 2024.

Just recently, it called for a Bitcoin rally in January 2024 and a correction near the top in March 2024. With most of these predictions “seeing the light of the day,” lead analyst Markus Thielen has highlighted the impact and differing risk management approaches between institutional investors and retail traders. 

According to the research firm, their ability to accurately predict Bitcoin’s behaviour emanates from their deep understanding of historical trends and driving forces within the crypto industry. To them, this has been the primary determinant of the asset dating back to its inception. Going back to time, the research firm attributed the August 2023 correction to the rising 10-year treasury bond yield and a hawkish Fed stance. Interestingly, the impact on the Bitcoin price was an unexpected nosedive, but the year-end completed the recovery.

Spot Bitcoin ETF Outflows Trigger Bearish Extension

Following the groundbreaking approval of the spot spot Bitcoin ETFs in January 2024, 10x Research anticipated a correction to $36,000 or $38,000 due to historical tendencies contrary to the bullish reports by other analysts. The research firm further highlighted the possibility of a +/-10% move, underscoring the $68,300 zone as a crucial point for any future bull run if breached. 

According to 10x Research, the current bearish extension was triggered by a shift in ETF buying behaviour. This is evident in the $162 million outflows from the various ETFs on March 30, 2024, marking the sixth consecutive day of outflows. The Grayscale Bitcoin Trust (GBTC) saw a withdrawal of $93.2277 million, extending its historical net outflow to $17.303.

Fidelity’s FBTC also saw a withdrawal of $35.28 million in the period under review, with Bitwise’s BITB recording an outflow of $34.31 million. Interestingly, only Ark’s ETF (ARKB) saw a net inflow. Though this slump is reported to be temporary according to a Crypto News Flash publication, it has drastically affected the market behaviour and forced several investors to exit their positions.

With this being a cause for concern, the $53,000/$55,000 of all-in mining cost could make things worse by sparking selling to protect operations. To the research firm, the correction could be extended to 25% to 29%. Also, there could be a possibility of a consolidation period rather than a sharp bullish reversal.

Following this report, Nic Puckrin, the co-founder and CEO of the crypto information portal Coin Bureau informed his followers that it would be more profitable to offload Bitcoins in May than in September. Interestingly, this coincides with a K33 report establishing that buying Bitcoin in October and selling in April has accrued an accumulative return of 1,449%. However, buying in May and selling in September has had a negative return of -29%.

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