- Markus Thielen reversed his bullish stance on Bitcoin (BTC) a few days before the halving.
- The 10x Research founder based his latest analysis on the likely postponement of interest rate cuts by the US Federal Reserve, the soaring prices of US government bond returns, and waning interest in US spot Bitcoin exchange-traded funds (ETFs).
- The analyst also shared the same bleak outlook in tech stocks.
A Bearish Outlook on Bitcoin
10x Research founder Markus Thielen, who correctly predicted Bitcoin’s rise to a new all-time high in February, just made a U-turn on his initially bullish stance for the prime digital asset. According to his recent notes, risk assets, including cryptocurrencies and tech stocks, may be on the verge of a major price correction.
Among the foreseen key culprits for the additional drop in their prices is the latest US inflation data that continues to move away from the Federal Reserve’s 2% target. The March figures showing a 3.8% increase in core inflation (excluding volatile food and energy prices) and a 3.5% rise in headline inflation (including food and energy costs) on a year-over-year basis is expected to further delay the much-anticipated interest rate cuts in June. The resilient employment data amid the rising prices of goods and services may also add justification to the Federal Reserve’s lack of urgency in pushing for the rate cuts.
“Our growing concern is that risk assets (stocks and crypto) are teetering on the edge of a significant price correction,” warned Thielen in a report to clients on Tuesday. “The primary trigger is the unexpected and persistent inflation.”
Meanwhile, Thielen emphasized the more lucrative yields of US government bonds, which may attract risk-averse investors.
“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,” he added.
Thielen confirmed as well that interest in US spot Bitcoin ETFs has somehow hit a roadblock as their five-day net inflows have crashed to zero. As a result of these events, the expert revealed they have unloaded some of their tech stocks but have remained on hold of their promising crypto assets.
“We sold all our tech stocks last night (at the open) as the Nasdaq is trading very poorly and reacting to the higher bond yield,” Thielen disclosed. “We only hold a few high-conviction crypto coins.”
“Overall, we are bearish risk assets (stocks and crypto),” the analyst summed it all up.
BTC Now
Since it lost its footing on Saturday during the Iranian attack on Israel, Bitcoin has seemingly struggled to surpass its resistance around the $66K line. As of this writing at 9:15 AM UTC on Tuesday, BTC is still stuck on the $63,300 mark with over 4% loss in the 24-hour chart, more than 10% dip in the seven-day range, and around 8% slump in the one-month bracket. Nevertheless, it’s still roughly 108% up in the one-year chart as it climbed from a $24,797.17 low to a $73,750.07 high within the larger frame.