10X Research Analysts Shift from Long to Short! Inflation Pressure Mounts, Bearish on Risk Assets like Cryptocurrencies

10X Research Analysts Shift from Long to Short! Inflation Pressure Mounts, Bearish on Risk Assets like Cryptocurrencies

10X Research Analysts Shift from Long to Short! Inflation Pressure Mounts, Bearish on Risk Assets like Cryptocurrencies

Analyst Predicts Bitcoin (BTC) Bottom in November 2022 and Recent Surge to All-Time Highs to be Followed by Bearish Outlook on Risk Assets Including Tech Stocks and Cryptocurrencies.

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Bearish Outlook on Tech Stocks and Cryptocurrencies
High Inflation and Interest Rates Diminish Attractiveness of Risk Assets

According to a report sent to clients on Tuesday by Markus Thielen, the founder of 10X Research:
Furthermore, Markus Thielen added that due to the poor performance of the Nasdaq and its high sensitivity to higher bond yields, the company sold all tech stocks at yesterday’s opening and now only holds a few confident cryptocurrencies. Overall, 10X Research currently holds a bearish outlook on risk assets (stocks + cryptocurrencies).

According to data from FedWatch, traders’ expectations for interest rate cuts by the Federal Reserve this year have dropped from six cuts at the beginning of the year to less than three cuts. The persistent high inflation in the United States, along with the resilience of the labor market and the economy, has driven the 10-year Treasury yield up 40 basis points this month to reach 4.61%, the highest level since November 2023. The sharp rise in risk-free rates has diminished the attractiveness of high-risk/high-return assets such as tech stocks and cryptocurrencies for investors.

Markus Thielen pointed out that a significant portion of Bitcoin’s rally in 2023/2024 was driven by expectations of interest rate cuts, a narrative that is now facing severe challenges. In addition, the inflow of funds into Bitcoin spot ETFs has started to dry up, with data showing that the average net inflow into Bitcoin spot ETFs over the past 5 days has dropped to zero.

Markus Thielen explained:
Furthermore, there are also market observers who believe that once the hype around the halving of mining rewards on the Bitcoin network every four years subsides, the pace of price correction may further accelerate.