According to 10x Research: Bitcoin is experiencing a significant downturn, but the signs were evident in the data, making this crash neither unexpected nor without cause. Here’s a breakdown of what’s driving Bitcoin’s latest price correction and what to expect moving forward.Macroeconomic Data Signals CorrectionUnderstanding Market Events: The current Bitcoin crash emphasizes the importance of paying attention to macroeconomic data and its impact on crypto markets. Bitcoin is highly sensitive to shifts in the economy, and positioning around these events has become crucial for traders.Bitcoin’s Strategic Rebuy Zone: On-chain data suggests that Bitcoin’s price correction is linked to new wallet activity and long-term holders exiting at high prices. A key signal for Bitcoin to become attractively priced again may be a drop into the $30,000 range.Breaking Support LevelsOn-Chain Data Trends: New Bitcoin addresses peaked in November 2023 and have sharply declined since. As short-term holders sold off their positions, long-term holders capitalized on high prices, signaling a market top. With increasing unrealized losses, Bitcoin is vulnerable to deeper corrections.Macroeconomic Indicators: The ISM Manufacturing Index, a leading economic indicator, confirms a cyclical peak for risk assets like Bitcoin. The Nasdaq and Bitcoin both reacted negatively to recent weak ISM prints, showing that economic indicators are driving Bitcoin’s repricing.Weakness Across SectorsBroader Economic Weakness: As the U.S. economy shows signs of weakness, DeFi and meme coin markets are also slowing down. The Ethereum network has seen a sharp revenue decline, supported by a downturn in DEX and meme coin trading. This broader slowdown is impacting both Ethereum and Solana, leading to further price corrections.Impact on Ether and Futures: Ether became highly vulnerable after the SEC hinted at ETH ETF approvals, leading futures traders to take long positions. When expectations weren’t met, Ether crashed in August, causing massive losses among traders and diminishing the appetite for risk.Bitcoin Spot ETF InfluenceETF Buyer Behavior: The hype surrounding Bitcoin Spot ETFs was a key factor driving high funding rates, which in turn fueled the self-reinforcing price cycle. Despite inflows of $17 billion into Bitcoin ETFs, these investors are now facing $2 billion in losses as Bitcoin’s price corrects. ETF outflows are signaling that many investors are exiting their positions.A Divergence from Gold: Bitcoin was marketed as “digital gold,” but unlike physical gold, which remains near all-time highs, Bitcoin has corrected like a typical risk asset. The demand for Bitcoin Spot ETFs has slowed, creating further downside pressure.The Future of BitcoinTopping Formation and Liquidations: Bitcoin’s topping pattern is playing out in a precise sequence. As new wallet growth slows and futures traders face liquidations, Bitcoin is increasingly behaving like a risk asset. This dynamic is likely to push Bitcoin prices down to $45,000 in the near term.In conclusion, Bitcoin’s recent crash can be attributed to a combination of macroeconomic factors, weak market flows, and on-chain data trends. Traders who stay informed and strategically position themselves around key data events may find opportunities to capitalize on future market shifts
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