Markus Thielen Warns of Impending Market Correction: Is Bitcoin Overheated?
The stock and cryptocurrency markets are on the brink of a significant price correction, according to Markus Thielen, the founder of 10x Research. Thielen recently made headlines after selling off all assets due to concerns about inflation, decreasing rate cuts, and rising bond yields.
In a research note, Thielen stated, “The primary trigger is the unexpected and persistent inflation. With the bond market now projecting less than three cuts and 10-year Treasury Yields surpassing 4.50%, we may have arrived at a crucial tipping point for risk assets.”
This bearish outlook comes as Bitcoin’s price dropped over 9.3% in a week, trading above $63,400 as of 9:15 am UTC. The decline in Bitcoin’s price could be attributed to falling expectations for an interest rate cut, as most traders now expect rates to remain unchanged.
Thielen also mentioned that his company sold all tech stocks and only holds a few high-conviction crypto coins, expressing a bearish sentiment towards risk assets in general.
On the technical side, Bitcoin’s relative strength index (RSI) suggests that the asset may be overheated, although it has cooled significantly from its 2024 high. Investor focus has shifted to the upcoming Bitcoin halving, with long-term holders starting to sell and move assets off exchanges.
Despite the current market uncertainty, a Bitfinex research report shared with Cointelegraph indicates that as long as short-term holders continue to absorb supply, Bitcoin price could see a recovery. This dynamic of short-term holders absorbing sell-offs from long-term holders could potentially lead to further price growth.
Overall, the markets are at a crucial juncture, with various factors contributing to a potential price correction. Investors and traders will need to closely monitor the situation and adjust their strategies accordingly to navigate the volatile market conditions.
