A recent report from 10x Research predicts that Bitcoin (BTC) could see its price drop to $45,000, signaling further volatility in the cryptocurrency market. With Bitcoin currently trading below $55,000, this potential decline is driven by several key factors, including reduced network activity, market sentiment, and macroeconomic conditions.
Key Reasons for Bitcoin’s Price Decline
According to the report by Markus Thielen, Head of Research at 10x Research, several crucial indicators suggest a bearish outlook for Bitcoin’s price. One of the most prominent factors is the drop in active Bitcoin addresses, which has sharply declined since reaching a peak in November 2023. By March 2024, Bitcoin’s active addresses exceeded 1 million, but recent data shows that the number has fallen to just 612,000, indicating reduced user engagement.
The report also highlights the $1 billion Bitcoin ETF outflows that occurred this week as a bearish signal, reflecting waning institutional interest in the asset. Additionally, macroeconomic conditions, such as the weak US economy and massive futures liquidation, are further compounding the downward pressure on Bitcoin.
On-Chain Data and the Mayer Multiple Indicator
Glassnode data supports the bearish forecast, with the Mayer Multiple—a key metric used to identify speculative bubbles in Bitcoin—falling below the critical threshold of 1. This metric currently stands at 0.8, suggesting a more vulnerable market. Typically, a Mayer Multiple above 1 signals a bullish market, but when it falls below, it indicates a higher likelihood of a price correction.
Bitcoin’s price is also struggling to remain above the 200-day Exponential Moving Average (EMA), a crucial support level for many traders. Historically, when Bitcoin’s price fails to stay above this threshold, it often faces further declines.
Similarities to Previous Bitcoin Bear Markets
Looking at the BTC/USD weekly chart, analysts see parallels between Bitcoin’s current price movement and the market conditions leading up to the 2022 bear market. In November 2021, Bitcoin lost its support around $50,000 and dropped to $36,500 by January 2022. Presently, Bitcoin is hovering near similar support levels, with the potential to test the $50,000 mark again.
Should Bitcoin fail to maintain support at this level, the report suggests BTC’s price could drop to $48,338, and potentially even lower to $45,000. If the selling pressure intensifies, Bitcoin could face a further decline toward $40,000.
The Path Ahead: Will Bitcoin Rebound?
Despite the bearish outlook, there’s still a possibility for Bitcoin to regain momentum. If the Mayer Multiple rises above 1, this could indicate the start of another bull market cycle, potentially pushing Bitcoin’s price beyond its previous all-time high of $73,750.
However, for now, the market remains cautious, with analysts closely monitoring whether Bitcoin can hold key support levels. Investors should keep a close eye on on-chain metrics and macroeconomic developments, as these will likely dictate the future direction of Bitcoin’s price.
Conclusion
Bitcoin’s current price outlook appears uncertain, with 10x Research predicting a potential drop to $45,000 due to weakening network activity, ETF outflows, and broader market conditions. While there is hope for a recovery if key indicators shift, Bitcoin’s price faces significant resistance in the near term. Investors are advised to remain cautious and watch for any signs of a market rebound.