US Economic Concerns Weigh on Bitcoin, Says 10x Research

The price of the leading cryptocurrency risks remaining below the psychological threshold of $50,000 amid growing concerns about the economic stability of the United States. This is according to a report by 10x Research, as cited by Cointelegraph.

Marcus Thielen, the company’s founder, noted that the manufacturing sector’s business activity index (ISM) recently showed a significant decline. This traditional metric of the country’s “economic health” confirms fears about the precarious position of the United States.

According to data from Investing.com, on August 1, the ISM fell from 48.5 points to 46.8, contrary to the forecasted rise to 48.8.

A value below 50 has historically indicated an economic downturn, especially if it persists for several months. The last “positive” reading was recorded in April.

Thielen believes that traders’ decisions to open additional long positions using borrowed funds “may be premature.”

“The market structure, including transitions from fiat to cryptocurrency, has been weak for several months. […] It is unlikely that major players will invest in conditions of high volatility and unpredictable prices. Many still need to exit positions and reduce their portfolio debt.”

The report states that the correlation between ISM and Bitcoin suggests a “grim outlook” for the crypto market. Analysts note that historically, digital gold has experienced sharp corrections when the index reached this boundary.

Despite economic weakness and a “bloated” stock market, experts from 10x Research anticipate price adjustments in the near future:

“The S&P 500 index will likely have to align with the ‘real’ economy, which could lead to a 20% drop in stocks.”

Market Status

At the time of writing, Bitcoin is trading at $50,300, having fallen 16.5% in 24 hours. The total market capitalization has dropped below $1.9 trillion.

All other cryptocurrencies have also undergone a strong correction: Ethereum fell below $2300, and Solana below $120.

Technical analyst Ali noted that the 30-day MVRV indicator has dropped to levels last seen in November 2022. Similar values were observed after the FTX collapse.

The #Bitcoin MVRV Ratio (30D) hasn’t been this low since November 2022, right after the #FTX collapse. That period marked a bottom and an excellent buying opportunity. pic.twitter.com/9wB1ZsjocP

— Ali (@ali_charts) August 5, 2024

“This period marked a bottom and an excellent buying opportunity,” added the expert.

CryptoQuant noted that “real volatility” will be observed after the opening of the U.S. trading session.

Real price volatility will occur during U.S. market hours

“If the current price drop is due to an exit trend or new issues in the U.S. market, the Coinbase Premium Gap (CPG) should show a significant reaction.” – By @mignoletkr

Read more ?https://t.co/mcXGe74kGQ pic.twitter.com/lMaDBy1XIg

— CryptoQuant.com (@cryptoquant_com) August 5, 2024

“If the current price drop is caused by an exit trend or new issues in the U.S. market, the CPG should show a significant reaction,” wrote the analyst known as mignoletkr.

Robert Kiyosaki, author of the bestseller “Rich Dad, Poor Dad,” characteristically reminded of the need to stay calm. However, the businessman admitted to having had a drink.

My apologies. Having a drink. Continuing on…. Crashes are times
When the brave get richer and the cowards get poorer…. Because they sell or do nothing. The world is filled with poor cowards. Be smart. Grow
Some balls, stay calm, and invest when the cowards are quitting.…

— Robert Kiyosaki (@theRealKiyosaki) August 5, 2024

“My apologies. Having a drink. Continuing on… Crashes are times when the brave get richer and the cowards get poorer… Because they sell or do nothing. The world is filled with poor cowards. Be smart. Grow some balls, stay calm, and invest when the cowards are quitting. Take care,” wrote Kiyosaki with slight typos.

ForkLog has discussed with experts the reasons for the dump and identified conditions under which major coins might begin to recover their prices.