The stock and cryptocurrency markets are poised at a potentially critical juncture, facing the likelihood of a significant price correction, as indicated by Markus Thielen, founder of 10x Research.
Thielen, in a recent statement, conveyed his bearish sentiment by announcing, “We sold everything last night.”
He attributes this decision to ongoing inflation, fewer expected interest rate cuts, and an increase in bond yields.
In his April 16 research note, Thielen elaborated on the catalysts of his concern: “The primary trigger is the unexpected and persistent inflation.
“With the bond market now projecting less than three cuts and 10-year Treasury Yields surpassing 4.50%, we may have arrived at a crucial tipping point for risk assets.”
This cautious outlook follows a notable decline in Bitcoin’s price, which dropped over 9.3% last week, leaving it just above the $63,400 mark, as recorded by CoinMarketCap at 9:15 am UTC.
The research note suggests that this downturn might be tied to diminished expectations for rate cuts.
Thielen wrote, “Most of this 2023/2024 bitcoin rally is driven by expectations that interest rates would be cut, and this narrative is being seriously challenged now.”
Market sentiment aligns with this, as CME Group’s FedWatch Tool shows a dominant expectation (99% of participants) that the Federal Reserve will keep rates steady between 5.25% and 5.50%.
Amid these market movements, Thielen disclosed that his company also divested from all tech stocks at Monday’s market opening, though they continue to hold “a few high-conviction crypto coins,” affirming an overall bearish stance on risk assets.
The analysis also touches on Bitcoin’s technical indicators, pointing out potential signs of being overbought.
READ MORE: Norway Implements Stricter Regulations on Data Centers, Targeting Bitcoin Miners
The relative strength index (RSI) on Bitcoin’s weekly chart stands at 67, a marked decrease from its 2024 peak of 88 on March 24, as per data from TradingView.
The RSI serves as a gauge for whether an asset might be overvalued or undervalued based on recent price movements.
Moreover, attention within the cryptocurrency community has shifted towards the upcoming Bitcoin halving event.
This anticipation has led to long-term holders selling off their holdings and moving their assets off exchanges.
A research report from Bitfinex, shared with Cointelegraph, highlights a change in investor demographics: “There has been a shift in the makeup of the Bitcoin investor base, with new entrants (Short-Term Holders) absorbing the supply sold by Long-Term Holders (LTHs).
This is evidenced by the rising Market Value to Realized Value ratio for STHs, albeit it is still below peak levels seen in previous cycles.
If this dynamic of STHs absorbing LTH sell downs persists, then it could indicate room for further price growth.”
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On April 15, Hong Kong took a significant step in the cryptocurrency market by authorizing the launch of spot exchange-traded funds (ETFs) for Bitcoin and Ether.
The Hong Kong Securities and Futures Commission (SFC) granted conditional approval for the country’s inaugural spot BTC and ETH ETFs, as per a report by Reuters.
This groundbreaking move involves at least three offshore Chinese asset management firms, including the Hong Kong branches of Harvest Fund Management, Bosera Asset Management, and China Asset Management (ChinaAMC).
These firms are poised to introduce their spot Bitcoin and Ether ETFs shortly.
The collaboration for these launches includes partnerships with local companies. Bosera will work alongside Hong Kong-based HashKey Capital.
Meanwhile, OSL Digital Securities, a licensed digital asset platform, will serve as the sub-custodian for the ETFs of ChinaAMC and Harvest.
The SFC’s conditional approval is based on several requirements being met, such as fee payments, document submissions, and obtaining the necessary listing approval from the Hong Kong Stock Exchange (HKEX).
The ETFs in question will operate under an “in-kind” creation model, which allows for the issuance of new ETF shares in exchange for Bitcoin and Ether, contrasting with the cash-create redemption model more commonly seen in the U.S.
Patrick Pan, Chairman and CEO of OSL, emphasized the innovative nature of this approach in an interview with Cointelegraph. “
The in-kind subscription model for the spot BTC and ETH ETFs in Hong Kong represents a substantial innovation,” he said.
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Pan highlighted that this method would bolster market liquidity by facilitating the direct exchange of assets for ETF shares, which reduces the dependency on cash settlements and promotes continuous trading activities.
He added, “This principle is essential for ensuring market stability and is consistent with practices in both digital and traditional asset ETFs.”
Pan also commented on the preliminary approval status, noting it indicates that the firms have successfully navigated through most of the critical regulatory evaluations, bringing them closer to their launch goals.
However, he mentioned it’s still too soon to predict the exact start date for trading. “The dates are not yet confirmed.
“However, all parties involved are diligently working to expedite the launch.
“The initiation of these ETFs is expected to significantly boost capital inflow into the digital asset market in Hong Kong,” Pan explained.
Despite reaching out for further comments, Cointelegraph received no immediate responses from the SFC, Bosera, or Harvest at the time of publication.
Following the regulatory green light, the HKEX is anticipated to need about two weeks to complete the listing procedures and other necessary arrangements before the ETFs can officially begin trading.
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Norway has introduced new legislation aimed at regulating data centers, including those used for Bitcoin mining, by requiring them to officially register and disclose detailed information about their operations and leadership.
This move positions Norway as the first European nation to implement such a regulatory framework, which is expected to provide local authorities with a clearer insight into the activities of data centers, thus enabling more informed decisions regarding their approval or rejection.
“The purpose is to regulate the industry in such a way that we can close the door for the projects we do not want,” stated Terje Aasland, Norway’s Minister of Energy.
This new legislation could increase scrutiny for Bitcoin mining operations, particularly in light of the imminent Bitcoin halving event that is set to decrease mining rewards by half, potentially impacting the profitability of these miners.
Aasland further expressed concerns about the environmental impact of crypto mining, which he linked to significant greenhouse gas emissions.
“[Crypto mining] is linked with large greenhouse gas emissions, and is an example of a type of business we do not want in Norway,” he explained.
His comments reflect a broader disinterest in hosting businesses that merely seek to exploit Norway’s relatively cheap energy resources without contributing positively to the community.
READ MORE: Bitcoin Dominance Reaches Three-Year High as Altcoins Suffer Steep Declines
This stance comes at a time when Bitcoin mining activities, particularly in northern Norway where electricity costs are lower, have been reported to consume as much electricity as the entire district of Lofoten.
Despite these significant energy uses, Aasland highlighted that the desired data center projects are those that serve beneficial societal functions, such as storage servers which play a vital role in the country’s social infrastructure.
The exact number of Bitcoin mining operations in Norway is currently unknown; however, this new registration requirement is part of a broader initiative aimed at advancing Norway’s digitalization strategy, according to Karianne Tung, the Minister of Digitalization and Public Governance.
She indicated that the data gathered from this legislation would aid in furthering national digital projects.
As the Bitcoin community braces for the halving, which could lead miners to liquidate approximately $5 billion worth of Bitcoin post-event, the industry faces additional pressures.
Markus Thielen, head of research at 10x Research, underscored the financial stakes involved with his estimate on the potential impact of the halving on Bitcoin’s market.
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The Grayscale Bitcoin Trust (GBTC) has been facing a notable decline, with over $166 million and more than 2,500 Bitcoin being withdrawn on Friday, April 12.
This latest withdrawal is part of a broader trend that has seen the fund’s outflows reach a staggering $16.2 billion since its transformation into a spot Bitcoin exchange-traded fund (ETF) in January, according to Farside Investors.
Throughout the month of April, daily withdrawals have ranged from $75 million to $300 million, highlighting ongoing volatility in investor activity.
This downturn in GBTC is mirrored by a general slowdown in inflows across other spot Bitcoin ETFs, pointing to a decrease in investor engagement in the sector.
Over the past week alone, GBTC experienced outflows totaling $767 million, contributing significantly to the overall negative flow observed in spot Bitcoin ETFs.
In contrast, BlackRock’s iShares Bitcoin Trust ETF has seen a more positive trajectory, with assets under management exceeding $15 billion, which is beginning to close the gap with GBTC.
Grayscale CEO Michael Sonnenshein, speaking on April 10, hinted that the outflows from the Grayscale Bitcoin Trust might be nearing stabilization, indicating a potential uptick in trader and investor optimism. Despite this hopeful outlook, outflows have persisted.
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Sonnenshein also commented on the high fees associated with GBTC, noting its 1.5% management fee, significantly higher than the 0.30% average fee of its competitors, as a potential factor driving the outflows.
He further explained the market dynamics, stating, “Markets often exhibit high excitement when commodity or thematic exposure products first emerge.
However, these products mature as time passes, leading to market consolidation as investors focus on a few offerings.”
Despite these challenges, there have been periods of reduced outflow, such as on April 10, when the outflows dropped to $17.5 million—a sharp decline from the $154.9 million seen the previous day.
Yet, the average daily outflow since January remains high at $257.8 million.
The shift in GBTC’s structure came after a successful lawsuit against the U.S. Securities and Exchange Commission, which led to its conversion to an ETF in January, alongside the introduction of nine other spot Bitcoin ETFs.
Adding to the market’s dynamics, the bankrupt crypto lending firm Genesis recently sold approximately 36 million GBTC shares to purchase 32,041 Bitcoin, reflecting ongoing shifts within the broader cryptocurrency landscape.
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On April 15, Bitcoin began trading at around $65,500 as the Wall Street market opened, following a significant drop over the weekend.
This stability marked a calm start to the traditional finance (TradFi) trading week in the United States, according to data from Cointelegraph Markets Pro and TradingView.
This period of calm contrasted sharply with the weekend’s events, where the BTC/USD pair fell to near $61,000, a decline triggered by geopolitical instability in the Middle East.
Fortunately, Bitcoin managed to avoid the more substantial losses experienced by some altcoins.
The focus among traders has now shifted towards the upcoming Bitcoin block subsidy halving, an event anticipated to create turbulent market conditions.
This event is known for significantly impacting trading patterns.
Keith Alan, co-founder of trading resource Material Indicators, commented on the situation, saying, “With the halving coming up in less than a week, I won’t be surprised to see a pump to the halving followed by a dump after the halving to shakeout weak hands before the next leg up.
“Of course escalating geopolitical tensions might alter the trajectory, so certainly tuned into that.” He also noted that resistance might persist above $70,000 until there is more buying activity at prices closer to the current spot.
Additionally, CoinGlass data indicated an increase in bid liquidity for Bitcoin at and below $66,000.
READ MORE: Victims of $6.2 Billion Chinese Fraud Scheme Seek UK Help to Recover $4.3 Billion in Seized Bitcoin
In the same vein, popular trader Skew noted significant activity in the market, stating, “Lots of systematic retests this morning, important day I think for crypto market to establish the next phase for direction.”
He emphasized the importance of maintaining exponential moving averages (EMAs) across 4-hour and daily timeframes and highlighted the need for Bitcoin’s relative strength index (RSI) to climb back above the central 50 level.
The cryptocurrency market also reacted to news from Hong Kong, which approved exchange-traded funds (ETFs) for both Bitcoin and Ether.
This development refocused attention on the potential for similar ETFs in the U.S.
Despite the weekend’s market downturn, Skew expressed concern over investor reactions, noting, “Red premarket, going to be keeping an eye on these today and potential price impact of spot flows.”
Reports from Cointelegraph indicated a slowdown in overall ETF inflows compared to previous weeks.
Meanwhile, the Grayscale Bitcoin Trust (GBTC) saw a modest outflow of about 1,600 BTC ($105 million). Popular trader Daan Crypto Trades suggested on X that the importance of GBTC flows as a market indicator might be diminishing.
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Bitcoin has reached a significant milestone, achieving its highest level of market cap dominance in three years.
This surge has occurred amidst a downturn for altcoins, which have experienced notable price declines.
According to data from Cointelegraph Markets Pro and TradingView, as of April 12, Bitcoin’s share of the total cryptocurrency market capitalization spiked to 56.3%.
This increase marks a shift in market dynamics, emphasizing Bitcoin’s growing influence compared to other cryptocurrencies.
The price of Bitcoin itself faced challenges as the weekend approached, with a drop below $65,300 due to a series of liquidations.
However, altcoins were hit harder, with many of the top twenty cryptocurrencies by market cap experiencing declines exceeding 15%.
This decline in altcoin values has resulted in a significant shift in market share towards Bitcoin.
The cryptocurrency landscape now appears more “Bitcoin-heavy” than it has been since April 2021, underscoring a reversal in the broader market’s composition.
Social media commentator and trader Bagsy noted the significance of this trend on the platform X, stating, “I don’t typically look at Bitcoin dominance, but the chart is impressive considering the amount of new altcoins birthed into the market every day.”
The sentiment was echoed by Daan Crypto Trades, another trader who pointed out the comparative resilience of Bitcoin during this period.
“Yes, the actual hit on $BTC was very minimal and the total downside also wasn’t very relevant,” he commented on X.
READ MORE: XRP Shows Signs of Recovery Ahead of Bitcoin Halving, Poised for Bullish Reversal in 2024
He further highlighted the severe impact on altcoins, noting, “The real damage was done in the Altcoin sector which wiped out billions of Open Interest and made for wicks up to 50%.”
Historically, Bitcoin bull markets are characterized by an initial dominance breakout, followed by a catch-up phase for altcoins after a period of Bitcoin price stabilization.
This pattern has not yet been observed in 2024 for altcoins, which have performed well but haven’t sustained a rally.
Looking ahead, trader Mikybull Crypto predicts a shift in the current dynamics. In a post on X, he suggested, “Altcoins market cap is perfectly following the previous Alts season step.
This is the last shake-off before it rips explosively upward coupled with Bitcoin dominance downward trend.”
These observations are supported by a chart shared by Mikybull Crypto, which draws parallels between the current market situation and the late 2020 period when Bitcoin last broke out of its macro trading range below $20,000.
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Victims of an investment fraud scheme orchestrated by Tianjin Lantian Gerui Electronic Technology in China are attempting to reclaim $4.3 billion in Bitcoin.
This amount, originally purchased with funds misappropriated from the victims, has been seized by the U.K. government.
Represented by a group, the victims have reached out to the Chinese Ministry of Foreign Affairs, urging it to collaborate with the U.K. to facilitate the return of their assets.
From 2014 to 2017, the fraudulent scheme amassed over $6.2 billion.
In response, the victims’ group has also engaged with China’s Ministry of Public Security and gathered nearly 2,500 signatures in support of their plea.
They intend to submit these to both the ministries involved.
The crux of their request was articulated in a letter to the Chinese government, stating, “We do not want, and will never accept, a situation where Bitcoins are confiscated by the UK and not returned to us.”
The letter appeals for the Chinese authorities to assist by proving the victims’ rightful ownership of the Bitcoin to the U.K.
READ MORE: Bonk Cryptocurrency Faces 4% Overnight Decline Amid Market Volatility
The matter came to light following a botched attempt by Jian Wen, a former hospitality worker, to launder part of the stolen funds through the purchase of a $30-million mansion using Bitcoin.
The transaction drew suspicion as Wen failed to account for the origin of the funds, triggering a U.K. investigation.
This investigation led to a 2021 raid on a property rented by Wen and her boss, Zhimin Qian—who is believed to be the mastermind behind the scheme—where authorities discovered 61,000 BTC.
At the time of the seizure, the cryptocurrency was valued at $1.7 billion, but its value has since escalated to approximately $4.3 billion, reflecting the volatile nature of Bitcoin prices.
Initially, Wen claimed the Bitcoin had been mined but later described it as a “love present” from Qian, who has since fled the U.K.
Following these events, Wen faced legal proceedings and was found guilty of three counts of money laundering by Southwark Crown Court on March 20, spanning activities from October 2017 to January 2022. She contested all charges but was nonetheless convicted.
The outcome for the seized Bitcoin and the victims’ efforts to reclaim their funds remains uncertain as the U.K. government has yet to disclose how it will handle the situation.
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On April 13, the price of Bitcoin experienced a significant drop of over 8.4%, triggered by heightened geopolitical tensions after Iran attacked Israel.
This event led to a sharp decrease in Bitcoin’s value, plummeting from approximately $67,000 to $61,625 and erasing over $130 million in market capitalization within moments of the news breaking.
This downturn wasn’t isolated to Bitcoin alone; other major cryptocurrencies also felt the impact.
Ether dropped by 9.81% to a price of $2,927, and Solana saw a substantial decline of 15.96%, bringing it down to $129.
According to data from CoinMarketCap, the global cryptocurrency market cap fell by 8.19% to $2.23 trillion.
The attack involved Iran deploying drones towards Israel as a response to a prior Israeli airstrike on a diplomatic facility in Damascus, Syria.
This earlier strike resulted in the deaths of seven Iranians, including two generals. The incident not only escalated the conflict but also involved Iran seizing a cargo ship owned by an Israeli billionaire.
The situation further intensified with U.S. President Joe Biden’s warning on April 12 about potential imminent attacks by Iran.
President Biden assured support for Israel, stating: “We are devoted to the defense of Israel. We will support Israel, we will help defend Israel, and Iran will not succeed.”
These remarks underscored the U.S. commitment to aiding Israel amidst the escalating tensions.
The friction between Iran and Israel marks a significant escalation in regional conflicts, following the October 7, 2023, terrorist attacks by Hamas which sparked ongoing confrontations between Israel and Hamas. The U.S. has been actively attempting to mitigate further escalations.
U.S. officials have advised Israel against escalating the situation further. A government source relayed to CNN the frustrations within the U.S. administration over the lack of prior notice from Israel about its planned airstrike.
It was reported that Israel notified a U.S. official of the airstrike only when its aircraft were already en route to Syria.
“We were not aware that Israel was going to carry out this airstrike in advance,” the official stated. “Minutes before it happened and when Israeli planes were already in the air, Israel reached out to a U.S. official to say they were in the process of conducting a strike in Syria.
It did not include any details on who they were targeting or where it would be conducted, and the strike was already underway before word could be passed through the U.S. government.”
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In the last 24 hours, Bitcoin’s value plummeted by over 7%, which resulted in significant financial losses amounting to $256 million for traders holding long positions.
This drop is part of a broader trend, not considered unusual by experts, even amid rising geopolitical tensions in the Middle East.
According to Benjamin Cowan in a recent post on X dated April 13, such drops are par for the course in the current market cycle.
“So far, this is a normal drop. In fact, we’ve had several 20-22% drops this cycle,” Cowan explained.
Similarly, Michael Saylor, CEO of MicroStrategy, remains bullish, asserting on the same day on X that, “Chaos is good for Bitcoin.”
In the face of these declines, Rekt Capital, a pseudonymous cryptocurrency trader, suggested that Bitcoin’s current price dip is a precursor to a recovery, though it will likely test investor resolve.
“Bitcoin will retrace deep enough to convince you that the Bull Market is over,” Rekt stated, indicating a belief in the eventual resurgence of Bitcoin’s value.
On the specific details of the plunge, Bitcoin’s price fell to a low of $60,919 before stabilizing around $62,060, and later recovering slightly to $63,858, as reported by CoinMarketCap.
The sharp decline also triggered broader market liquidations, with a total of $319.15 million wiped out from leveraged Bitcoin positions in the same timeframe, comprising $256.58 million from long positions and $62.58 million from shorts, according to data from CoinGlass.
READ MORE: Ethereum’s Upcoming Pectra Upgrade to Transform Crypto Wallets with Enhanced Smart Contract Features
Further risks loom as short traders are poised for potential liquidations worth $1.05 billion should Bitcoin revert to its previous 24-hour high of $67,000.
The larger cryptocurrency market felt the ripple effects, with a staggering $945.9 million liquidated from 253,554 traders overall.
Market sentiment, as measured by the Crypto Fear and Greed Index, also saw a downturn to a greed level of 72 from last week’s 78, indicating a shift in trader perception.
Additionally, the global crypto market cap has decreased by 8%, dropping to $2.23 trillion.
Despite these challenges, demand for Bitcoin remains robust, particularly among long-term investors or “permanent holders.”
Cointelegraph reports that according to CryptoQuant, demand now surpasses the supply of new Bitcoin entering the market, a trend expected to intensify following the upcoming Bitcoin halving, further underscoring the growing scarcity of the cryptocurrency.
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In 2024, Bitcoin exchange-traded funds (ETFs) have drawn considerable attention, primarily fueled by the retail sector, while major banks and traditional financial institutions remain on the sidelines.
During an interview at Paris Blockchain Week, VanEck CEO Jan van Eck shared insights with Cointelegraph about the dynamics shaping the Bitcoin ETF market in the United States.
Jan van Eck expressed his surprise at the rapid success and high volume of capital flowing into these ETFs, which have seen days with inflows in the billions of dollars.
“I was surprised, but I don’t think it’s traditional investors yet.
“I still think 90% of the flows are retail. You’ve had some Bitcoin whales and some other institutions move some assets in, but they were already exposed to Bitcoin,” he commented.
The CEO noted the absence of U.S. banks in the Bitcoin ETF space, as they have not yet permitted their financial advisers to recommend such investments to clients.
He anticipates potential shifts in the coming month with possible entries from big institutional investors, but he remains cautious, remarking on the nascency of the Bitcoin ETF market.
“There’s a lot of maturation to happen. A lot of technology will be developed on-chain, so there’s a long way to go,” van Eck stated.
Addressing the advantages of Bitcoin ETFs over direct purchases of Bitcoin, van Eck highlighted the benefits of convenience, safety, and affordability.
He pointed out the cost benefits of ETFs, noting, “Convenience, safety and affordability.
You had 2% spreads on many centralized exchange platforms like Coinbase.
“We have single-digit spreads for the ETFs and no fees or low fees.
“It’s easier just to do a buy ticket than anything else.”
VanEck, the firm founded by Jan’s father, John van Eck, in 1955, has a history of pioneering new investment avenues, starting with the first gold fund in the U.S. during 1968.
Drawing from his father’s legacy and responding to market trends, Jan van Eck has adopted a cautious yet opportunistic approach to emerging assets like Bitcoin.
“In 2017, we said Bitcoin will not replace gold, but it will significantly complement it in people’s portfolios,” he asserted.
Van Eck also touched on broader economic issues, noting that Bitcoin is increasingly seen as a reliable store of value, potentially more so than gold in the current economic climate.
He also pointed to significant fiscal challenges facing the U.S., suggesting that these will influence market dynamics soon.
Despite the buzz around Bitcoin ETFs, van Eck remains measured in his assessment of their impact, indicating that the global and deep nature of the Bitcoin market limits the influence of U.S.-based ETFs alone.
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