Markus Thielen, head of research at 10x Research, said risk assets such as cryptocurrencies and stocks could see “significant price corrections” in the coming weeks.
Thielen shared his insights in an April 16 note to investors, writing that the crypto market is heading toward a “significant inflection point” that could lead to a noticeable correction in prices. Ta. The analyst revealed that his company sold all its tech stocks in anticipation of this bearish event.
“I sold everything last night,” Thielen wrote.
The founders cited fewer interest rate cuts, rising bond yields and persistent inflation as deterrents behind the bearish outlook.
This analysis comes after Bitcoin has fallen by 11% over the past week. The leading cryptocurrency has fallen 6.7% in the past 24 hours. At the time of publication, it was trading at $61,988.93. Thielen attributed the decline in Bitcoin to the decline in expectations for a US interest rate cut.
“Most of this 2023/2024 Bitcoin rally has been driven by expectations that interest rates will be lowered, and this narrative is now seriously challenged,” he added.
According to CME's FedWatch tool, designed to help gauge market sentiment, 97.5% of market participants expect interest rates to remain unchanged.
This forecast is consistent with recent comments from San Francisco Fed President Mary Daley. The Daily says there is “no urgency” in the US to cut interest rates.
Additionally, Thielen revealed that his company still holds “high-conviction crypto coins.” However, the company's overall sentiment remains bearish, he revealed.
Thielen’s warning follows an earlier bearish scenario for Bitcoin. In a note to investors dated April 15, he estimated that crypto miners could lose $5 billion worth of Bitcoin in the months following the halving. Citing historical data, the analyst concluded that the crypto market could be in a “summer lull” for an extended period of time.
