Key Concerns from the 10x Research Report
Recent findings from a 10x Research report, shared with Cointelegraph, highlight emerging concerns about the strength of the U.S. economy, signaling potential turbulence for the cryptocurrency market. The report suggests Bitcoin (BTCUSD) may struggle to surpass the $50,000 threshold, potentially dragging other cryptocurrencies into a prolonged downturn.
A notable decline in the ISM Manufacturing Index—a key indicator of economic health—has been identified as a critical factor in this outlook. Markus Thielen, founder of 10x Research, cautioned crypto traders against taking on leveraged long positions amid the current volatility and weak market structure. He emphasized that fiat-to-crypto on-ramps remain underutilized, and significant investors are refraining from entering the market due to high volatility and unpredictable pricing.
Correlation Between ISM Index and Bitcoin’s Performance
The 10x Research report draws attention to historical data suggesting a direct correlation between the ISM Index and Bitcoin's performance. Historically, Bitcoin has faced sharp corrections following peaks in the ISM Index. This trend raises concerns about the broader crypto market's resilience during periods of economic instability.
Furthermore, the report speculates that the stock market, including the S&P 500, may face a significant downturn, with predictions of up to a 20% decline as valuations align with underlying economic realities.
Indicators of U.S. Economic Weakness
The report identifies shifting perspectives within the U.S. Federal Reserve as another key concern. In recent public statements, Federal Reserve Chair Jerome Powell acknowledged that the U.S. economy might be weaker than initially assessed. This acknowledgment points to a potential dovish shift in monetary policy, aimed at mitigating further economic challenges if inflation trends downward as anticipated.
Such economic adjustments could have ripple effects on investor confidence in both traditional and cryptocurrency markets, further intensifying the challenges faced by digital assets like Bitcoin.
No comments