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Why 10x Research Sees a Bitcoin Drop to $50,000 This Summer | Markets Outlook
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Foreign.
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Welcome back to Consensus live from Consensus Hong Kong. The markets are on edge. Everyone is asking what's next. Joining us to break down the data is Marcus Thielen, founder and CEO of 10X Research, known for his pinpoint accuracy and institutional grade analysis. Marcus is here to tell us if this is just a dip or a deeper trend. Marcus, welcome.
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Yeah, thanks for having me.
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All right, we all have to ask, I mean, the last weeks have been kind of crazy in crypto. Some people were blaming actually this region for some of the, some of the challenge that was going on. What's your take of what's happened over the last couple of weeks?
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Yeah, I mean, of course there's a long story and a short story, right. I think the sort of medium story is that since the summer we have seen a lot of the OG wallets selling, but the ETFs were still buying. And that has really reversed sort of like end of last year. But what also happened is actually a lot of the crypto hedge funds were Underwater really in Q4. And that usually means within a one month to three months lag, you're going to see a lot of redemptions. And of course these hedge funds need to liquidate some positions to kind of, you know, fulfill those redemptions. And that's when we have seen the Coinbase premium. So where Bitcoin trades on Coinbase basically in negative, so in discount really. So we can see a lot of institutional investors worth selling relative to global investors. That was how we really came into like the new year. But then really beginning of this year we expected that the ETFs would start reaccumulating again because investors have new money really to deploy. But that didn't really happen. So ETFs had two days of inflows and then bang, outflows again. And I think that really brought the imbalance really again to the negative side. And then, you know, towards the end of kind of January, we had actually better U.S. economic data. You know, the ISM manufacturing survey came out, you know, about 50, so an expansion for the second time only in the last three years. And that's when people start to reprice actually gross expectations in the US and that means less rate cuts. And when you look, you know, the last two times when the Fed unexpectedly cut, usually in September 2014, 2024 and 2025, Bitcoin had a big push up. But with stronger economic data that means less rate cuts. And then, you know, similar time period, you know, the probability that Kevin Wash would be named as a new Fed chair, you know, really shot up and it was confirmed. But that's when we started to sell off, you know, at the 87,000 level. And the 87,000 level was a very big important level for trend funds. So the trend signal turned negative. And then basically there was a new downtrend in place and what was really, really crucial, and I think a lot of people actually have noticed this, that when Trump was elected in November 2024, Bitcoin ramped up from 70,000 to 90,000 within like 10, 12 days. So there was very little trading activity happening. So there was a big gap, a big liquidity gap. So when bitcoin went to 87,000, it fell into the liquidity trap. And then what happened is that at 75,000, there was a lot of negative option gamma happening. So the market makers needed to hedge themselves and just sell futures and futures and futures with the large, with the last negative gamma hitting at 60,000. So it's almost like, okay, the last market maker is hatched, now we can reverse. So that's what we did. And then our expectation is, and sorry for going on for long. Right. But I think that's what we kind of, you know, go to. We expected kind of Bitcoin stay above 70,000 for around three weeks, but we think we might actually go now lower and take out the low because there's no real buying happening. And usually when you see these cascading liquidations, it's not the end of the downtrend, it's actually the beginning of a downtrend. Because as a trader, you're really naturally long. And when you lose money, it's not that you suddenly say, oh, let me put more money into crypto, it's rather the opposite. I need to find a level to get out. And so that's kind of the scenario where we're in right now.
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So you expecting this summer to trade at 40 to 50k? You've also said in December that with midterms typically see a correction of over 60% percent in some cases. Is that still kind of the thesis for why we're going to that 40, 50K, or is it more about that liquidity gap and like that spot where we need to get back to for a base?
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Yes. Last time, you know, I spoke with, with Jennifer was on, I think November 12th, where we laid out sort of like this scenario of a 60% correction, which sounded like pretty crazy, Right. And you know, Coindesk put it on Twitter, which had of course, a lot of great comments from people, but we dropped really 58% so far already. So I think the scenario is actually very much in place because when you look at what happened during the last Bull cycle, we also had this kind of like second wave higher up in this ABC correction. So we think we're still in this B wave right now, which turns into a C wave. And our view is more that probably during the soccer FIFA World cup we might be bottoming out then I think the earliest episode is probably April and I really think we're going to go to 50,000. I do think there is a possibility that Kevin Wash comes out and is actually, you know, at least through his nomination hearings, that he's more dovish because he's not going to be hawkish. Right. The market ran with a hawkish story and we wrote a report in December that he's going to be perceived as hawkish, at least initially until he really comes out. But he's not going to rock the boat now until he's really confirmed. Right. But I think then he's going to come out and he's going to be dovish and maybe then we're going to rebound. But I think the probability is still high that we're going to go to this 50,000 because I think people are still relatively long. And to address a little bit the rumors about like some Asian fund, you know, of course we had a fund in mind but it, you know, but based on our cross channel checks, it's not that fun. And we don't think it's a single entity because when we look at for example, Hyper Liquid, right? Hyper Liquid had like huge volumes on October 10th and hyper liquid accounted, you know, to around like 53% of all the liquidations. So it's not just one entity got liquidated on October 10th. It's more like the broader market. And we had a similar scenario last week where you know, on Hyper Liquid trading volumes went from like 5 billion to like 28 billion. So a lot of people got liquidated there Again, so it's not like one entity, it's more the broader market. So I don't buy this like a multi strategy fund. I mean I used to work at Millennium, which is a big multi strategy fund. Nobody is short puts there, right? Especially not in Bitcoin. It's really like a hedge position. So that's not how the market works. And that's why I think it's not one entity. That's why we also have not heard from one specific entity being going under in October 10th because it was spread among many entities. And that's why we had this negative feedback loop where redemptions and so on. So it's really unfortunately where we look at how ETFs, you know, they have bought around 50, 54 billion US dollars in worse than in bitcoin with an average price of 90,000. So they are like underwater by 10 billion roundabout, right? 11, 12 billion. But when you look where Bitcoin is versus when, when the ETF started, they are literally 30 billion too long right now. Right. So that's still, I think a lot of, you know, head scratching, you know, where people maybe need to adjust positions. I think that is still the risk that those people might unwind versus the native, the crypto native. They already liquidated a large part. So that's the risk for the summer. All right.
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Fascinating stuff, Marcus. Thank you so much. That was Marcus Thielen, CEO of 10X Research.