Outside Source
According to Markus Thielen, head of research at 10x Research, risk assets like crypto and stocks could see a “significant price correction” in the coming weeks.
Sharing his insights in an April 16 investor note, Thielen wrote that the cryptocurrency market is moving towards a “crucial tipping point,” which could lead to a notable correction in prices. The analyst revealed that his firm has sold all tech stocks in anticipation of this bearish event.
“We sold everything last night,” wrote Thielen.
The founder cited decreasing rate cuts, rising bond yields, and persistent inflation as the deterrents behind his bearish outlook.
The analysis follows Bitcoin’s 11% drop over the past week. The flagship cryptocurrency is down 6.7% in just the past 24 hours. At the time of publication, it was trading at $61,988.93. Thielen attributed Bitcoin’s drop to waning expectations of a cut in U.S. interest rates.
“Most of this 2023/2024 bitcoin rally is driven by expectations that interest rates would be cut, and this narrative is being seriously challenged now,” he added.
According to CME’s FedWatch tool, a platform designed to help gauge market sentiment, 97.5% of market participants expect the interest rates to remain unchanged.
The expectations align with recent comments from Mary Daly, the president of the San Francisco Federal Reserve Bank. According to Daly, there’s “no urgency” for the US to cut rates.
Furthermore, Thielen revealed that his firm still holds some “high-conviction crypto coins.” However, he clarified that the company’s overall sentiment remains bearish.
Thielen’s warning follows his previous bearish scenario for Bitcoin. In an April 15 investors note, he speculated that cryptocurrency miners could be offloading $5 billion worth of Bitcoin in the months following the halving. Citing historical data, the analyst concluded that the crypto market could be seeing an extended period of “’ summer’ lull.”
This article first appeared at crypto.news
