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Why Bitcoin Might Drop Another 20%: 10x Research

Published 01/05/2024, 18:48
Updated 01/05/2024, 20:10
© Reuters.  Why Bitcoin Might Drop Another 20%: 10x Research
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Benzinga - by Murtuza Merchant, Benzinga Staff Writer.

Crypto research firm 10x Research on Wednesday underscored its prediction that the ongoing Bitcoin (CRYPTO: BTC) correction may take prices into the low $50,000s.

What Happened: In their latest email newsletter, the team around lead analyst Markus Thielen highlight the differing risk management approaches between institutional investors and retail traders.

Their research suggests the average entry price for U.S. Bitcoin ETF holders sits around $57,300, potentially even higher, a level Bitcoin prices are rapidly approaching.

Despite the predicted correction, 10x Research maintains a positive long-term outlook.

Bitcoin’s recent one-year high validates their early 2023 prediction of a new bull market, further reinforced by its proximity to their forecasted halving price of $63,160.

Additionally, their 2023 year-end target of $45,000 was nearly achieved, and their post-ETF approval target of $57,000, later revised to $70,000, underscores their continuous analysis and adaptation.

Their ability to accurately predict market movements stems from a deep understanding of historical trends and the driving forces within the crypto industry.

As 10x Research points out in their previous reports, analyzing these factors has been instrumental in their successful predictions throughout the current bull market.

Also Read: Don’t Get Left Behind: Web3 Wallets Offer More Than You Think In Today’s Market

Why It Matters: Looking back, the August 2023 correction was attributed to rising 10-year Treasury bond yields and a hawkish Fed stance, mirroring the situation during the August 2015 RMB devaluation.

While the initial impact was a sharp decline, Bitcoin ultimately recovered significantly by year-end.

Similar foresight was applied in January 2024, where 10x Research anticipated a correction to $36,000/$38,000, citing the historical tendency for corrections following major Bitcoin product approvals.

They recommended hedging long exposure but turned bullish again as Bitcoin rebounded, reiterating their $70,000 target.

March 2024 saw another crucial turning point.

Recognizing the potential for a +/-10% move, 10x Research established a line in the sand at $68,300, indicating a potential significant top if breached.

This aligns with their current prediction of a correction towards $52,000/$55,000 within the ongoing bull market.

Several factors contribute to this anticipated correction.

The research highlights a shift in ETF buying behavior, with six consecutive days of outflows observed.

What’s Next: As the average entry price of $57,300 is approached, further ETF unwinding is expected, potentially pushing prices down.

Additionally, the estimated all-in mining cost of $53,000/$55,000 for Bitcoin miners could trigger selling to protect operations.

While a 25% to 29% correction is anticipated, 10x Research acknowledges the possibility of a consolidation period instead of a sharp snapback rally.

As industry leaders gather at events like Benzinga’s Future of Digital Assets on Nov. 19th, insights from 10x Research and other experts will be invaluable in navigating the complexities of the current bull market and preparing for potential corrections within the broader landscape.

Read Next: Ex-Binance CEO Changpeng Zhao Sees Crypto Industry Entering ‘New Phase’

This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Image: Shutterstock

© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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