YEREVAN (CoinChapter.com) — Bitcoin is set for a significant drop, according to 10x Research. The cryptocurrency, which was trading above $60,000 on July 4, is expected to fall below $57,000, with a potential decline to $50,000. This prediction marks a notable shift in market sentiment.
10x Research links this expected decline to fewer buy flows and more sell flows. Markus Thielen, an analyst at 10x Research, stated,
“Our data from early June already hinted at an overbought market ripe for correction.”
Breaking the $60,000 mark toward $50,000 shows a market correction driven by more selling and fewer buyers.
Bitcoin Drops 5.44% to $57K Amid Liquidity Concerns
The sudden 5.44% drop in Bitcoin’s price to $57,468 affects investors significantly. This decline has hit market liquidity and investor sentiment, shown by Bitcoin’s $1.1 billion market cap and a 57% increase in trading volume.
10x Research notes that breaking the “key level for BTC miners and spot Bitcoin ETF buyers” could speed up the price drop. As support levels break, sellers will look for liquidity, adding to sell pressure.
The upcoming Mt. Gox repayments of $8.5 billion worth of BTC, starting in July, add to this sell-off. These repayments will likely influence the market, pushing the trend down.
Long-Term BTC Holders Cash Out, Adding to Sell-Off
Another factor in the sell-off is the actions of long-term BTC holders. A recent analysis from IT Tech shows these holders are cashing in on profits, adding to the market pressure.
The Spent Output Profit Ratio (SOPR) from long-term holders was over 10 on July 3. This means these holders sold BTC for at least ten times their purchase price. Usually, long-term holders keep their investments for five to seven years, but current market conditions prompted them to sell.
This profit-taking by long-term holders adds to the overall sell-off, pushing Bitcoin’s price down.
10x Research Cautions on Bitcoin, Predicts Further Declines
10x Research has a cautious view of Bitcoin’s price. The report advises traders to manage risk due to expected continued volatility.
“We warned that this was not the time to be complacent,”
The report shows a “Double Top Formation” for Bitcoin’s price since December 2023, indicating possible further declines. This pattern suggests the market could face more downward pressure.
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