Crypto News – BTC Dominance Rises as U.S. Economic Concerns Grow
Crypto News – Recent findings from a 10x Research report reveal mounting concerns about the United States’ econo tability, which could have significant repercussions for the cryptocurrency market.
Bitcoin Price Threatened
The report, shared with Cointelegraph, indicates that the Bitcoin (BTC) price could fall (and remain) below the crucial psychological mark of $50,000, signaling red flags for other cryptocurrencies.
Economic Indicators Show Weakness
The ISM Manufacturing Index, a traditional barometer of economic health at the heart of these concerns, has recently witnessed a substantial downturn.
Market Cautions from Experts
Speaking with Cointelegraph, Markus Thielen, founder of 10x Research, explained that it “may be premature” for crypto traders to open further leveraged long positions. He stated, “The market structure, including fiat-to-crypto on-ramps, has been weak for months […] it’s unlikely that significant players will invest amid high volatility and unpredictable prices. Many still need to exit positions and deleverage their portfolios.”
Historical Correlation with ISM Index
The 10x Research report speculates that the historical correlation between the ISM Index and BTC indicates a bleak forecast for the crypto market. “Historically, Bitcoin has experienced sharp corrections when the ISM peaked.” While the ISM Index now indicates economic weakness and the stock market is potentially inflated, the report reveals that adjustments are expected imminently.
Stock Market Implications
“The S&P 500 might need to align with the ‘real’ economy, potentially leading to a 20% stock decline.”
Signs of U.S. Economic Weakness
The report’s insights highlight that the U.S. economy’s status is unsteady due to the shifting position of the U.S. Federal Reserve. “In the past 48 hours, it has become apparent that the U.S. economy is weaker than the Federal Reserve initially believed.”
Potential Policy Shifts
The report further highlights that Fed Chair Jerome Powell reinforced this point, indicating a potential dovish shift in policy if inflation decreases as anticipated, aiming to cushion further economic downturns.
BTC Dominance Shifts
On Aug. 5, BTC dominance, a ratio of the asset’s market capitalization to the rest of the crypto market, hit a new yearly high of 58% as crypto and stock markets crashed.
Impact on Ether and Other Cryptocurrencies
The shift in dominance percentage co-aligned with the sudden sell-off of Ether (ETH), which fell by as much as 18% in two hours. IG Markets analyst Tony Sycamore informed Cointelegraph that this collapse in market price amid a rise in BTC dominance reminds the market that crypto sits at the “pointy end” of the risk asset spectrum.
FAQ
What recent findings are highlighted in the 10x Research report?
The 10x Research report reveals growing concerns about the U.S. economic strength, suggesting that Bitcoin (BTC) might fall below the psychological mark of $50,000. This potential decline could signal trouble for other cryptocurrencies. The report emphasizes a significant downturn in the ISM Manufacturing Index, which is a traditional economic health indicator.
Why might Bitcoin’s price fall below $50,000 according to the report?
According to the report, Bitcoin’s price might fall below $50,000 due to the recent substantial downturn in the ISM Manufacturing Index, which reflects broader economic weaknesses. The report suggests that the correlation between the ISM Index and Bitcoin indicates a challenging outlook for the crypto market.
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