Digital asset research firm 10x Research has warned that the price of Bitcoin (BTC) could fall to $50,000, predicting a significant correction as the price continues to crash. 10x Research believes the current decline may be the start of a further plunge.
According to CoinMarketCap data, Bitcoin is trading at $57,767 after losing nearly 4% in the last 24 hours and more than 5.5% in 7 days. Also, MarketWatch data shows that the king coin has lost more than 18% in 1 month and over 15.6% in 3 months. Nonetheless, BTC has risen by 37.41% and over 90.5% in the last year.
Despite price swings, many still see BTC as one of the best digital assets for investment. This position varies because while some consider Bitcoin the top-rated cryptocurrency, others, like Michael from 99Bitcoins, believe the best crypto to invest in may be a meme coin like Pepe Unchained (PEPU) or WienerAI (WAI). These new assets have a high potential for growth, and offer earning options via staking, with massive APY rewards.
Explaining Bitcoin's Potential Plunge
Nevertheless, 10x Head of Research Markus Thielen warns of a potential fall. According to Thielen, one of the major factors against Bitcoin's rise is the asset's technical and psychological support level at $60,000. Explaining that this is an important point for spot BTC exchange-traded fund (ETF) buyers and Bitcoin miners, Thielen also points out that it marks the "bottom" of the asset's three-month trading range. Sounding a note of warning, the analyst wrote:
"Price declines could accelerate as support gets broken and sellers scramble to find liquidity. Only ill-informed traders are willing to buy here. Breaking this support could cause a sharp decline to the low $50,000s."
For about a month, 10x Research has repeatedly offered a bearish narrative for Bitcoin. In May, 10x Research faulted the popular stock-to-flow model for a few reasons, including its failure in at least one previous projection. Recently, the research firm warned that the "Trump Pump," from the Bitcoin market rally that followed Trump's increased chance of winning the election, is unsustainable because the election has not yet been decided. In addition, a previous research report includes several reasons Bitcoin could plunge. One of these is the likelihood of miners liquidating more BTC even as the price neared $60,000.
Another factor that may further Bitcoin's plunge is a 10x Research market structure analysis, which concludes that inflows to the Bitcoin market have peaked. According to 10x, miners, stablecoin issuers, and ETFs are "no longer positively contributing to liquidity in the ecosystem." While there are also several bullish forecasts, Bitcoin is still well below itsMarch record.
Interestingly, a 10x Research note to investors recommended maintaining positions with Bitcoin and avoiding Ethereum.
Market Reaction to Bitcoin Crash
The crash in Bitcoin's price has triggered heavy liquidations in the last 24 hours. According to data from CoinGlass, total liquidations in the past 24 hours hit $369.83 million, across 131,389 traders. The total comprises $332.72 million and $33.58 million, in long and short trades, respectively. The largest single liquidation order occurred on Binance, an ETHUSDT order valued at $18.48 million. Rating by exchange, Binance had the largest amount of liquidations at $175.53 million, with OKX and Huobi in the second and third positions at $99.61 million and $46.44 million, respectively.
Despite the continuous slump in Bitcoin's price, El Salvador still buys one Bitcoin daily. El Salvador first announced the plan in November 2022 under President Nayib Bukele's leadership, and has continued its accumulation. The country, the first to officially recognize Bitcoin as legal tender, also added mining to its Bitcoin endeavors and has produced more than 470 Bitcoins in three years. As of May, the treasury holds 5,750 Bitcoins.
