Bitcoin needs to drop to the “low $40,000s” to offer an ideal entry into the bull market, according to the technical analysis of a cryptocurrency analyst from 10x Research.
Technical analysis: the importance of price levels of spot Bitcoin ETFs
As anticipated, an expert in the crypto sector suggests that investors should wait on the sidelines until the price of Bitcoin drops to the lower range of $40,000 to get an ideal buying opportunity before the next bull phase.
Markus Thielen, head of research at 10x Research, wrote the following in a report on August 7:
“To obtain the best entry point in the bull market, we aim to bring the price of Bitcoin below $40,000. We expect another big rally attempt.”
The last time Bitcoin (BTC) reached these levels was on February 6, when it was trading at $42,577, according to the data from CoinMarketCap.
At the moment Bitcoin is valued at around $56,848, down 12.89% compared to July 31. Thielen is not the only one predicting this possibility. Other analysts believe that Bitcoin could fall below $40,000 in the coming months.
Timothy Peterson, founder of Cane Island Alternative Advisors, wrote the following in a post on August 5:
“$40,000 and $80,000 are equally likely in the next 60 days.”
Crypto Rover said to his 808,400 followers on Twitter (X):
“If Bitcoin breaks this support, the next ones will be $40,000.”
David Gokhstein, founder of Gokhstein Media, adds:
“I would like to see Bitcoin drop to $50K, or even $40K. It would be a perfect opportunity to buy more.”
Thielen: “the HODL strategy is not advisable in a volatile Bitcoin market”
Thielen is also skeptical about adopting the hodl strategy at this time. Although $60,000 has been a solid support level for Bitcoin since March, the price has now fallen below this threshold for two consecutive days.
With the volatility expected in the short term, Thielen advises against a buy-and-hold strategy, noting that neither Bitcoin nor Ethereum currently offer the high risk-reward ratio that has been seen recently in the U.S. stock markets.
“Neither Bitcoin nor Ethereum are showing the constant and high bull trends of the Sharpe ratio that investors in the US stock market have enjoyed with minimal effort.”
Despite this, Thielen believes that the current price of Bitcoin may represent a buying opportunity, suggesting setting a stop loss at $54,000, as the “risk remains to the downside”.
“Especially because we have seen three consecutive days of outflows from ETFs that do not seem to be buying this dip.”
Thielen highlighted that investors in the spot Bitcoin ETFs launched in the United States on January 11 are now at a loss, as the average purchase price was around $60,000.
“Given the current bear trend of Bitcoin, retail investors, who often follow trends, might hesitate to engage in massive ETF buy-the-dip flows.”
Thielen was surprised by the fact that, despite the 17 billion dollars invested in spot Bitcoin ETFs since their launch, Bitcoin fell below $50,000 on August 5, approaching the January 11 launch price of $46,656.
