Everything indicates that the US economy is weaker than expected and that could cause a large sale of Bitcoin, research company 10x Research predicts.
Predicting a much bigger crash for Bitcoin
The recent fall in price a Bitcoin This could be just the beginning of a much bigger crash, crypto research company 10x Research predicts. This decline is the result of an approaching economic storm and the digital currency’s disconnection from the broader stock market.
The analysis, written by Markus Thielen from 10x Research, noted that there have recently been positive signs regarding the stability of the crypto market. This ranged from institutional interest in spot Bitcoin ETFs to the price of a BTC holding company despite the return of billions in Bitcoin by Mt. Gox. However, this has changed in the last few days.
“The trend line near $70,000 was confirmed for the sixth time – however, the situation quickly took a negative turn,” the group wrote. “In the last 48 hours, it has become It is clear that the US economy is weaker than the Federal Reserve initially expected.”
A big problem for the financial markets
The weakening underlying economy, as indicated by the ISM Manufacturing Index, a key metric calculated by the Institute for Supply Management, is a major problem for the stock and crypto markets.
“Historically, Bitcoin has experienced sharp corrections when the ISM has arrived,” the 10x research report says. “What makes this situation particularly dangerous is the ongoing impact of the COVID stimulus and aggressive government support, which could have artificially depressed the stock market. “
While the Federal Reserve has taken a dovish tone and proposed rate cuts in the fall, the study warns that this may be too little, too late to prevent an economic downturn.
Increased chance of decline and impact on Bitcoin
The group’s forecast indicates that America is likely to enter recession by 2025, a trend that has historically been associated with declines in the stock market. If this situation pans out, Bitcoin could experience a massive selloff.
“Supposing the stock market follows the downward trend of the ISM Manufacturing Index or even begins to anticipate a future decline, stocks are likely to fall significantly over the next few quarters.”
“This would also have a negative impact on Bitcoin,” the researchers continued. In that case the The price of Bitcoin they could revisit the $50,000 level and drop even lower.”
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2024-08-03 19:51:21
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