In a surprising turn of events, a research firm has made a shocking prediction, foreseeing another 20% decline for Bitcoin. The primary cause cited for this anticipated fall is the prolonged outflow from spot Bitcoin ETFs.
The research firm has linked the current bearish run to a shift in ETF buying behavior and the high mining costs of $53,000 to $55,000. Bitcoin has experienced a bloodbath, with its price plunging below $60,000 in an 8% weekly fall and a 30% monthly decline.
Unfortunately for active investors, this downward trend is expected to continue as 10x Research, a crypto research firm, identifies underlying factors that could trigger a 20% drop to below $50,000. It is worth noting that 10x Research accurately predicted the Bitcoin low in March 2022, as well as the surge to $63,160 by March 2024. The research firm also correctly predicted the $45,000 price by December 25, 2023, and identified the Bitcoin miner as a key investment for 2024.
Lead analyst Markus Thielen has emphasized the impact and differing risk management approaches between institutional investors and retail traders. According to 10x Research, their ability to accurately predict Bitcoin’s behavior stems from their deep understanding of historical trends and driving forces within the crypto industry. They believe this has been the primary determinant of the asset’s performance since its inception. Looking back, the research firm attributes the August 2023 correction to the rising 10-year treasury bond yield and a hawkish stance from the Federal Reserve. Interestingly, while the impact on the Bitcoin price was an unexpected nosedive, the year-end eventually saw a recovery.
The bearish extension currently experienced by Bitcoin is a result of a shift in ETF buying behavior, according to 10x Research. This is evident in the significant outflows of $162 million from 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 million. Fidelity’s FBTC also experienced a withdrawal of $35.28 million, while Bitwise’s BITB recorded an outflow of $34.31 million. Interestingly, only Ark’s ETF (ARKB) saw a net inflow. Although this slump is reported to be temporary, it has had a significant impact on market behavior and has forced several investors to exit their positions.
Adding to the concern is the high all-in mining cost of $53,000 to $55,000, which could lead to further selling in order to protect mining operations. According to the research firm, this correction could extend to a range of 25% to 29%. Furthermore, instead of a sharp bullish reversal, there could be a consolidation period.
Following this report, Nic Puckrin, the co-founder and CEO of the crypto information portal Coin Bureau, advised his followers that it would be more profitable to sell off Bitcoins in May rather than in September. Interestingly, this coincides with a K33 report that found buying Bitcoin in October and selling in April has yielded an accumulative return of 1,449%. However, buying in May and selling in September has resulted in a negative return of -29%.
In conclusion, the research firm’s prediction of another 20% fall for Bitcoin has sent shockwaves through the crypto industry. The prolonged outflow from spot Bitcoin ETFs and the high mining costs are identified as the primary reasons behind this anticipated decline. Investors are advised to carefully consider their positions and closely monitor market trends.