A stunning revelation has been made by a research firm, which predicts that Bitcoin could experience another 20% decline. The main reason cited for this expected drop is the continuous outflow from spot Bitcoin ETFs.
The research firm has linked the current bearish trend to a shift in ETF buying behavior and the high mining costs of $53,000 to $55,000. The price of Bitcoin has been on a downward spiral, with an 8% decrease in the past week and a 30% decrease over the past month.
Unfortunately for active investors, the decline is expected to continue as 10x Research, a crypto research firm, identifies factors that could lead to a further 20% drop, pushing the price below $50,000. It’s worth noting that 10x Research accurately predicted the Bitcoin low in March 2022 and the subsequent surge to $63,160 by March 2024. They also correctly predicted the price of $45,000 by December 25, 2023, and identified Bitcoin miners as a key investment for 2024.
Lead analyst Markus Thielen has emphasized the impact and different risk management approaches of 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 in the crypto industry. They believe this understanding has been the primary determinant of Bitcoin’s price 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 by the Federal Reserve. The unexpected nosedive in Bitcoin’s price was eventually followed by a recovery by the end of the year.
The current bearish extension is said to have been triggered by a shift in ETF buying behavior. On March 30, 2024, there were outflows of $162 million from various ETFs, marking the sixth consecutive day of outflows. The Grayscale Bitcoin Trust (GBTC) experienced an outflow of $93.2277 million, continuing its historical net outflow of $17.303 million. Fidelity’s FBTC and Bitwise’s BITB also saw significant outflows, while only Ark’s ETF (ARKB) experienced a net inflow. This slump, although reported to be temporary, has had a significant impact on the market and led many investors to exit their positions.
In addition to the outflows from ETFs, the research firm highlights the high mining costs as a cause for concern. The $53,000 to $55,000 all-in mining cost could lead to further selling in order to protect mining operations. The research firm suggests that the correction could extend to 25% to 29%, and there could be a period of consolidation rather than a sharp bullish reversal.
Following the release of this report, Nic Puckrin, the co-founder and CEO of Coin Bureau, a crypto information portal, advised his followers to sell their Bitcoins in May rather than September for maximum profitability. This coincides with a K33 report, which states that buying Bitcoin in October and selling in April has yielded a cumulative return of 1,449%. However, buying in May and selling in September has resulted in a negative return of -29%.
In conclusion, Bitcoin is facing a challenging period as it continues its downward trend. The research firm’s predictions, based on historical trends and factors such as ETF outflows and mining costs, suggest that the decline could continue. Investors will need to carefully consider their risk management strategies in light of these findings.
