Benzinga - Bitcoin (CRYPTO: BTC) is down 6.1% on the day, trading at $62,620, and according to a recent report by 10x Research, the crypto king’s sell-off may not be over yet.
What Happened: According to 10x Research, Bitcoin’s price action this week will be closely tied to the ETF flow data from Monday and Tuesday, as well as how the Federal Reserve shapes its narrative around the macro perspective, particularly regarding interest rates.
While Bitcoin is a long-term asset that is influenced by inflation and interest rates, these macroeconomic factors have not consistently impacted Bitcoin’s price, as evidenced by its peak in November 2021 and bottom in January 2023. However, 10x Research suggests that this “could change.”
While Bitcoin is a long-duration asset and impacted by inflation and the macro factors not only impacted the Bitcoin’s peak in November 2021 and bottom in January 2023. This makes any correlation non-existent, however it "could change."
With the recent Ethereum Dencun upgrade and the slim chances of an Ethereum ETF approval, the research firm has identified a trading signal that points to a potential decline in the Ethereum token’s price. This signal could be used as a hedge against Bitcoin long positions.
Why It Matters: Several macro factors could influence Bitcoin’s short-term price action:
- U.S. 10-year bond yields have rebounded to 4.3% from 3.8%.
- Expectations for rate cuts have been reduced to three from the previous six.
- Inflation has persistently remained above 3%.
- Federal Reserve Chair Jerome Powell is expected to push back against rate cuts during this week’s FOMC meeting on March 20.
Although historical data suggested macroeconomic factors had a relatively minor impact on Bitcoin, “TradFi investors involved with Bitcoin [ETFs] might interpret Powell’s increasingly hawkish tone with caution.”
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What's Next: Last week, Bitcoin ETF inflows reached their saturation point and as inflows slow down the crypto king faces a genuine risk of a correction.
10x Research’s trading signals model portfolio has secured +80% gains, while forward-looking statistics predict a volatile +10% or -10% price movement in the next 10 to 20 days.
Despite the current challenges, Bitcoin could still climb higher in the coming months as the bull market continues. “A rally above $70,000 could open the door to much higher levels,” the report suggested.
According to the 10x Research model, Bitcoin completed the minimum 23.6% retracement from its $73,750 high. The first target level was set at $64,659, and if this level failed to hold, the preferred retracement level of $59,035 would serve as a crucial support level.
With the 21-day moving average currently at $65,367, the $64,600 to $65,300 range is a critical zone to prevent further price declines.
Last week, Bitcoin ETF flows peaked to saturation point and with a slowdown in inflows the crypto king is at a complete risk of correction.
Read Next: Bitcoin ‘Could Decline To $63,000,’ Says 10x Research Report, While Ethereum Faces Challenges
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