Key Points
- Markus Thielen of 10x Research predicts a significant price correction in the stock and cryptocurrency markets.
- Bitcoin’s price drop is attributed to decreasing expectations for an interest rate cut.
Markus Thielen, the founder of 10x Research, has expressed his concern that the stock and cryptocurrency markets are on the verge of a significant price correction.
Thielen’s sentiment is based on persistent inflation, diminishing rate cuts, and a rising bond yield.
Bitcoin’s Price Drop
Bitcoin’s price has experienced a 9.3% decrease during the week, trading above $63,400 as of 9:15 am UTC.
The decline in Bitcoin’s value is attributed to the dwindling expectations of an impending interest rate cut.
Traders are now expecting rates to remain unchanged, with 99% of market participants predicting that the Federal Reserve will maintain the current interest rates of 5.25% to 5.50%.
Thielen also revealed that his company sold all its tech stocks at the start of Monday’s trading session.
The company now only holds a few high-conviction crypto coins, reflecting a bearish stance on risk assets.
Is Bitcoin Overheated?
A key technical indicator suggests that Bitcoin may be “overbought”.
On the weekly chart, Bitcoin’s relative strength index (RSI) stands at 67, implying that the asset could be overheated.
However, Bitcoin’s RSI has significantly cooled from its 2024 high of 88, reached on March 24.
As the upcoming Bitcoin halving approaches, investor focus has shifted, prompting long-term holders to start selling and moving assets off exchanges.
According to a Bitfinex research report, if short-term holders continue to absorb the supply, Bitcoin’s price may see a recovery.
The report notes a shift in the Bitcoin investor base, with new entrants absorbing the supply sold by Long-Term Holders.
This dynamic could indicate room for further price growth if it persists.
