According to 10X Research founder Markus Thielen claims that the crypto market could be adjusting on “a crucial tipping point’’ and experiencing a potential price correction.
Inflation as primary price trigger
Markus Thielen noted that 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.
“Surprisingly, persistent and high inflation is the major trigger of the turmoil that has shaken major asset classes. As the bond market now indicates less than three cutting cycles and yields on the 10-year Treasuries eclipse 4,5%, we may have just witnessed a key turning point in the global markets.”
The negative note is supposed to be released after Bitcoin’s pullback, which has kept its price above $28,000. According to crypto market tracker CoinMarketCap, the price fell over 9.3% during the week to trade above $63,400. According to the research note, 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.
market interest rate expectations
According to the CME Group’s FedWatch Tool, traders expect rates to remain unchanged. Ninety—nine percent of market participants expect the Federal Reserve to maintain interest rates at the current 5.25%–5.50%, up from 93.6% a month ago. Thielen added that the company sold all its tech stocks during Monday’s trading session at the open.
Thielen Additionally emphasized that It is a fact that we have invested so few high-conviction coins. Therefore, we are nearly bearish about risk assets. A technical indicator suggests that Bitcoin price has become ‘overbought.’
By the weekly graph, BTC’s RSI, which is relativity strength index, is now 67, which implies that BTC may be overextended in the light of the recent surge. According to TradingView RSI is now retraced significantly from its All Time high of 88 *as hit on March 24. The RSI is the single most popular momentum indicator used to measure whether or not it is still oversold or overbought as per the magnitude of recent price changes.
Source: TradingView
As investors now focus more on the sharp Bitcoin halving, the recent hash rate decline and sell pressure on exchanges caused by major holders are the current trends.
