Bitcoin Halving Is Not a Bullish Event, Says 10x Research Analyst

Markus Thielen, a renowned research analyst, has signaled caution for the crypto market. According to him, ominous indicators are surfacing and it’s likely that prices will take a downturn in the near future.

Thielen, who has a history of forecasting cryptocurrency market swings between bull and bear trends, expressed his current viewpoint during an interview on CoinDesk’s Markets Daily podcast that there are no present factors capable of driving prices higher.

He explained that the usual factors pushing prices between $40,000 and $70,000 are no longer present. The primary cause, he mentioned, is the lack of new investments in spot bitcoin ETFs during the past few weeks. With investors having moved on from the excitement surrounding the January debut, these funds have seen minimal inflows.

“It seems that a lot of the TradFi investors aren’t biting anymore,” Thielen said.

Thielen pointed out that the decrease in investments into ETFs and the crypto market downturn are significant parts of a larger narrative. He emphasized that this broader trend is primarily influenced by the larger economic context, which continues to shape prices.

“According to Thielen, a significant portion of Bitcoin’s recent surge in value might be based on misconceptions. He emphasizes that the halt in ETF inflows wasn’t an unexpected development; it occurred around March 12, coinciding with the release of the consumer price index and producer price index reports.”

Towards the close of last year and the beginning of 2024, investors placed wagers that the Federal Reserve would make several interest rate reductions in the current year due to persistent decreases in inflation. This belief fueled a notable surge in risky assets like tech stocks and cryptocurrencies.

More recently, inflation data, specifically the March reports mentioned by Thielen, has indicated that it continues to surpass the Federal Reserve’s desired 2% level. Consequently, the Fed has expressed doubt about their ability to reduce interest rates in 2023.

Thielen expressed that it’s essential to deal with the overarching challenges first. Currently, he anticipates a pause in Bitcoin’s price movement which might persist for several weeks and potentially cause the cryptocurrency to drop near $50,000. However, he remains optimistic and believes Bitcoin will rebound by year-end.

Bitcoin Halving Is Not Bullish

Thielen also reminded investors about the approaching bitcoin halving on April 20th, which some believe will lead to a significant price increase. This optimism is based on bitcoin’s past behavior following halvings, during which the cryptocurrency often reached new record-high prices.

Thielen argued that the “bull moves” weren’t primarily caused by the Bitcoin halving itself, but rather by the favorable broader economic conditions. For instance, the last halving in May 2020 occurred during a period of significant monetary and fiscal stimuli due to the Covid-19 lockdowns.

He downplayed the significance of the halving, stating that it’s not the primary influencer. Instead, he emphasized the importance of larger economic factors.