10x Research Attributes Bitcoin Correction to Overbought Conditions

The recent pullback of the leading cryptocurrency is a typical correction driven by the asset being overbought, according to analysts at 10x Research, reports CoinDesk.

“In last week’s report, we briefly noted that Bitcoin appears overbought in the short term, as indicated by elevated levels of the fear and greed index. Current short-term reversal signals have turned bearish, indicating the likelihood of a pullback over the next few days,” said the company’s founder, Marcus Thielen.

At the time of writing, digital gold is trading around $63,800, having dropped 3% in 24 hours.

According to his observations, since June, the first week of the month, when US manufacturing sector activity data (ISM Manufacturing) is released, has been characterized by a 10% pullback.

According to FXStreet, the September report will be published on October 1. It is expected that the data will indicate a continued contraction in manufacturing activity.

“[…] the leading indicators have fallen to levels close to recessionary. This makes tomorrow’s data extremely uncertain: if the figure falls below 48.0, it will trigger a new drop in Bitcoin, whereas a higher figure could provide a rally,” Thielen clarified.

$100,000 by Year-End?

As the third quarter concludes, uncertainty remains about Bitcoin’s potential to reach a six-figure rate. However, according to crypto analyst Swyftx Paw Hundal, a return to the all-time high (ATH) is quite feasible.

“I feel that the window to reach $100,000 by the end of the quarter is very narrow. Everything needs to go right from this point, and you just can’t be sure of that,” he added.

In Hundal’s view, the main scenario “after a break in market structure is reaching an ATH in the $75,000-80,000 range by Christmas.” He also emphasized that options traders anticipate a 75% rise in Bitcoin over the next three months.

This range of strike prices has remained “surprisingly stable” over the past six months, the expert noted.

Overall, Hundal is optimistic about the current price dynamics. This will be aided by the recent breakthrough of “lower lows and lower highs” as well as “global easing conditions.”

Earlier, experts stated that the speech by Fed Chairman Jerome Powell on September 30 and the US employment report at the end of the week will be key factors for the cryptocurrency market.

Back in 10X Research, they forecasted an imminent move of Bitcoin towards $70,000.