Amid the recent downturn in the broader cryptocurrency market, the concept of “buying the dip” has emerged once again, attracting traders and investors with the prospect of obtaining assets at lower prices. However, Careful is the watchword of Markus Thielen, CEO of 10x Research, a leading analyst in the crypto space.
Thielen’s latest warnings suggest that current market conditions may not yet be ripe for the optimistic strategy of buy by dip.
The basis of bearish sentiment
Thielen’s recent analysis, released earlier today, underscores a pessimistic outlook on main cryptocurrencies Bitcoin (BTC) and Ethereum (ETH), warning that it may be premature to buy the dip.
This guidance is rooted in a comprehensive approach to market analysiscombining analogue models, data-driven predictive models and objective analysis.
At the heart of Thielen’s cautious stance is a detailed report outlining the factors contributing to the firm, 10x Research’s, bearish outlook on Bitcoin and Ethereum.
Despite the seemingly attractive price for these cryptocurrencies, Thielen believes the market has not yet bottomed out, suggesting further declines before any significant recovery.
The report points to $63,000 and $60,000 as critical support levels for Bitcoin. A break below $60,000, warns Thielen, could precipitate a drop into the $52,000 to $54,000 range.
However, despite these pessimistic short-term indicators, Thielen remains optimistic about Bitcoin’s potential, predicting a rise to heights of over $100,000 within a year. Thielen noted:
Buying this dip is still too early. Technically, we still expect Bitcoin to trade below 60,000 before a more significant recovery attempt begins. Based on the previous new high signals, we could paint a bullish picture of 83,000 and 102,000 upside targets, but for now, we are more focused on managing the downside.
The critical juncture of the crypto market
The current state of the crypto market reflects a tense anticipation of the US Federal Reserve’s upcoming central bank announcements.
This decision is expected to significantly influence monetary policy and, by extension, the cryptocurrency market. Particularly, insights From the crypto futures exchange, Blofin suggests that the outcome of this announcement could substantially influence market sentiment.
Meanwhile, the market reacts in real time, with Bitcoin up slightly by 2.4% in the last 24 hours but still showing a notable decline over the past week. Adding to the complexity of market dynamics are the observations of Alex Krüger, a respected figure in macroeconomics and cryptanalysis.
Kruger attributes the recent price collapse due to various factors, including excessive market leverage, the wave of negative Ethereum sentiment, and the speculative fervor surrounding certain altcoins. These elements combine to paint a picture of a market at a crossroads, with significant volatility and uncertainty ahead.
Reasons for the accident, in order of importance
(for those who need them)
#1 Lots of leverage (funding is important)
#2 ETH driving the market south (the market decided that the ETF would not be approved)
#3 Negative BTC ETF inflows (be careful, data is T+1)
#4 Solana shitcoin mania (gone too far)-Alex Krüger (@krugermacro) March 20, 2024
Featured image from Unsplash, chart from TradingView
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