Markus Thielen, the founder of 10x Research, believes that the stock and cryptocurrency markets are approaching a critical tipping point that could lead to a significant price correction. Thielen recently made the decision to sell all of his holdings, pointing to persistent inflation, decreasing rate cuts, and a rising bond yield as the main reasons behind his bearish outlook.
Bitcoin, in particular, has experienced a 9.3% drop in price over the past week, trading above the $63,400 level as of 9:15 am UTC. This decline could be attributed to diminishing expectations for an impending interest rate cut, as noted in Thielen’s research. Currently, traders anticipate that the Federal Reserve will maintain interest rates at the current 5.25%–5.50%, with 99% of market participants expecting no changes, up from 93.6% a month ago.
To align with this bearish outlook, Thielen’s company decided to sell all of its tech stocks at the beginning of Monday’s trading session. This move comes as Bitcoin’s relative strength index (RSI) on the weekly chart sits at 67, suggesting that the asset may be overbought. However, the RSI has cooled significantly from its peak of 88 in March.
Investor attention has shifted towards the upcoming Bitcoin halving, prompting long-term holders to sell and move their assets off exchanges. If short-term holders can absorb this supply, there is a possibility of a recovery in Bitcoin’s price, according to a Bitfinex research report shared with Cointelegraph.