Why This Bitcoin Correction IS Very Different Than the 3 Previous Ones

👇1-14) Bitcoin has another 20% correction within a larger bull market. 10x Research is the only crypto research team that has accurately called all three 20% corrections (August 2023, January 2024, and March/April 2024) since the 5th Bitcoin bull market started officially on June 25, 2023. At that point, Bitcoin had made a new one-year high for the first time in a year (see our report from July 2023).

👇2-14) However, this correction is very different, as institutional investors have a risk management approach that differs from most retail traders. Based on our estimates, the average entry price of the US Bitcoin ETF holders is approximately $57,300—potentially even 1-2% higher - a level that Bitcoin prices are approaching fast - as we predicted.

👇3-14) Bitcoin's new one-year high has validated our early January 2023 prediction for the start of a potential new bull market. This positive trend is further reinforced by Bitcoin's proximity to our halving price projection of $63,160 (the actual price of $63,491), which we forecasted on October 28, 2022.

👇4-14) Our 2023 Christmas year-end target of $45,000 was almost achieved (the actual price was $43,613). While we called already on November 28, 2023 (still one of our best TV interviews), for a price target of $57,000 for the post-ETF approval period, we ramped up this target to $70,000 on February 1, 2024, when Bitcoin traded just at $40,000.

👇5-14) When we studied the history of Bitcoin and the driving forces of the crypto industry (here), a big takeaway was what drives prices and why various cycles are in place. This analysis (here) helped us call the bull market correctly and all three significant corrections.

👇6-14) On August 17, 2023, we warned that rising 10-year Treasury bond yields, combined with a moderately hawkish Fed, could cause a market correction as the Chinese currency weakened to a 17-year low. We compared the situation to the August 2015 RMB devaluation, which initially caused a sharp correction in Bitcoin, only to finish the year materially higher.

👇7-14) Bitcoin traded at $29,412 when we wrote the report. Less than 48 hours later, it sharply dropped to $25,409 as China's real estate worries caused a macro-induced sell-off. Chinese property conglomerate Evergrande had filed for bankruptcy protection, and Bitcoin crashed. We turned bullish again at the end of September 2023.

👇8-14) On January 3, 2024, when Bitcoin traded at $44,930, we called for a correction to $36,000/$38,000 (the actual low by the end of January was $38,500) as the market was massively exuberant. All previously approved Bitcoin products had seen major corrections (Bitcoin Futures December 2017, Coinbase IPO April 2021, and Bitcoin ETFs based on Futures October 2021). One explanation for a potential sell-off was that the SEC might delay the ETF approvals.

👇9-14) On January 3, we recommended hedging long exposure, but we turned bullish by the end of January when Bitcoin rebounded to $40,100 with a price target of $70,000 (covered by the crypto media on February 5).

👇10-14) As early as March 8, 2024, we had warned that the immediate outlook might be uncertain as ‘outside days’ signaled a +/-10% move with equal probability. While Bitcoin attempted to break above the triangle formed on March 8, a decline below $68,300 was our line in the sand where we expected a significant top to be in place.

👇11-14) The August 2023 and January 2024 corrections stopped at around -20%. Still, we suspect that this third correction, which started in March/April, will potentially cause a decline towards $52,000/$55,000, as we indicated during the last three weeks.

👇12-14) We already see that Bitcoin ETF buyers differ from the long-term holders many expect. We have seen six consecutive days of outflows, and as the average entry price ($57,300) approaches the current spot price ($59,800), we will likely see more ETF unwinding. Since March 18, the ETFs have seen outflows on 58% of all trading days.

👇13-14) We have seen $540m ETF outflows since Bitcoin's halving. There might have been a lot of ‘TradeFi’ tourists in crypto - pushing longs until the halving - this time is now over. We also expect that Bitcoin miners will have an aggregate all-in mining cost of $53,000/$55,000, which could cause more selling to protect their operations.

👇14-14) We expect more unwinding as the average Bitcoin ETF buyer will be underwater when Bitcoin trades below $57,300. This will likely lower prices to our target levels and cause a -25% to -29% correction from the $73,000 top - hence our price target of $52,000/$55,000 during the last three weeks. There might also be a period of consolidation instead of a snapback rally - stay tuned.