Bitcoin's sharp drop not over yet? 10x Research warns of two potential downturns in the coming week
As the monthly closing approaches, the price of Bitcoin is experiencing a pullback. According to data from CoinMarketCap, Bitcoin was trading at 63,800 at the time of writing, with a 24-hour decrease of nearly 3%. Looking back at the recent trend, Bitcoin has been steadily rising since the Federal Reserve announced a rate cut. Regarding this recent downturn, research firm 10x Research has described it as a typical buy-over pullback.
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Following the trend of general economic data releases in the past few months, Bitcoin faces selling pressure during the European time
Reports indicate that Bitcoin faced selling pressure during the early European trading session, breaking below the support line of the bullish trend, and suggesting that this movement is reminiscent of the price behavior in the months leading up to key U.S. data releases. Tonight, Federal Reserve Chairman Powell will speak at the National Business Economics Association annual meeting in Tennessee, and Friday will see the release of the non-farm payroll report, with Powell previously stating that the employment market is a key indicator of current Fed policy focus.
According to 10x Research data, this decline is a typical bullish pullback after being overbought.
Markus Thielen, founder of 10x Research, said: "In last week's report, we noted that BTC seemed overbought in the short term. As reflected in the rising Greed Fear Index, the reversal signal has turned bearish, indicating a possible pullback in the coming days."
Two major market variables in the past week, 10x Research maintains optimistic outlook for the fourth quarter
Markus Thielen added: "Since June, the characteristic of the first week of each month coinciding with the release of U.S. ISM manufacturing data is a 10% price drop. This drop is consistent with this pattern."
The September report will be released on October 1, and is expected to show that the manufacturing data for the last month of the third quarter will continue to tighten. "The ISM manufacturing data shows that leading indicators have dropped to near recession levels, making tomorrow's data uncertain. If it falls below 48.0, it may cause Bitcoin to drop again, while a higher number could drive a rebound," said Markus Thielen.
However, 10x Research still maintains an optimistic outlook for the fourth quarter, largely due to expectations of another two-notch rate cut by the Fed and China's recent announcement of large-scale stimulus measures.