Bitcoin May Plunge To $93k As Institutional Investors Face Pressure To Sell, 10X Research Says
Bitcoin may slide to $93,000 as institutional investors come under pressure from risk managers to liquidate holdings, 10X Research said.
Founder Markus Thielen said in a note to clients that a large chunk of Bitcoin is now held by low-conviction investors or with institutional players who may be under pressure from risk managers.
“Many of those coins now sit on vulnerable balance sheets, vulnerable not because of conviction, but because institutional risk managers and Bitcoin-skeptic executives may ultimately force those positions to be closed,” Thielen said.
If the price of Bitcoin drops any lower, those investors could start to engage in panic selling to limit their downside risk or even losses, he warned.
The Bitcoin price has plunged over 5% in the past month, and has tumbled more than 16% from its all-time high (ATH) of $126,198.07 on Oct. 6, according to CoinMarketCap.
BTC price (Source: CoinMarketCap)
The crypto king extended its downtrend by a fraction in the past 24 hours to trade at $105,169.20 as of 7:02 a.m. EST.
$100K Breach Could Push Bitcoin Down To $93K
Given the large amount of BTC that changed hands at the $101K level, Thielen said that a break below $100K could trigger sales from fragile holders.
If this happens, the analyst warned that it would accelerate the crypto’s decline into what he called a liquidity “air pocket” that is centered around $93K. This is the last major cluster of buying demand.
Thielen warned that a slide to $93K or lower could lead to even more volatility given that the average acquisition price for US spot Bitcoin ETFs (exchange-traded funds) is near $90K.
“Those $60.5 billion in ETF inflows may quickly come under scrutiny if price pressure accelerates,” Thielen said.
US spot BTC ETF flows (Source: Farside Investors)
Data from Farside Investors shows that spot Bitcoin ETFs in the US have seen strong outflows in the past two weeks. These outflows started on Oct. 29, when the funds lost $470.7 million collectively. The strongest outflows since then were seen on Nov. 4, with over $566 million flowing out of the funds on the day.
Since the negative flows started, there have only been two days of positive net daily inflows. The first day was on Nov. 6, and the second was yesterday, when investors added $239.9 million and $1.2 million to the products, respectively.
Related Articles:
About Author
About Author
