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Recent findings from a 10x Research report reveal growing concerns about the United States’ economic strength, which could have significant repercussions for the crypto market.
The <a href="https://mail.10xresearch.co/p/bitcoin-dropping-50000-weak-data-week-rekindles-fears" target="_blank" rel="noopener nofollow">report</a> shared with Cointelegraph reveals that the Bitcoin (<a href="https://cointelegraph.com/bitcoin-price">BTC</a>) price could fall (and stay) below the psychological mark of $50,000, signaling red flags for other cryptocurrencies.
The ISM Manufacturing Index, a traditional economic health barometer at the core of these concerns, has recently witnessed a substantial downturn.
Speaking with Cointelegraph, Markus Thielen, founder of 10x Research, explained that it “may be premature” for crypto traders to open further leveraged long positions.
<blockquote data-ct-non-breakable="true">
 “The market structure, including fiat-to-crypto on-ramps, has been weak for months [...] it’s unlikely that significant players will invest amid high volatility and unpredictable prices. Many still need to exit positions and deleverage their portfolios.”
</blockquote>
Related: <a href="https://cointelegraph.com/news/bitcoin-breaks-below-50000-august-2024">Bitcoin dips below $50K: Crypto market crashes 17%</a>
<h2 data-ct-non-breakable="true" id="bitcoin-and-stock-market-implications">Bitcoin and stock market implications</h2>
The disconnect revealed in the 10x Research report speculates that the historical correlation between the ISM Index and BTC indicates a bleak forecast for the crypto market.
<blockquote data-ct-non-breakable="true">
 “Historically, Bitcoin has experienced sharp corrections when the ISM peaked.”
</blockquote>
While the ISM Index now indicates economic weakness and the stock market is potentially inflated, the report reveals that adjustments are expected imminently.
<blockquote data-ct-non-breakable="true">
 “The S&amp;P 500 might need to align with the ‘real’ economy, potentially leading to a 20% stock decline.”
</blockquote>
Related: <a href="https://cointelegraph.com/news/warren-buffett-right-5-things-bitcoin-this-week">Was Warren Buffett right? 5 Things to know in Bitcoin this week</a>
<h2 data-ct-non-breakable="true" id="the-us-economy-shows-signs-of-weakness">The US economy shows signs of weakness</h2>
The report’s insights highlight that the US economy’s status is unsteady due to the shifting position of the US Federal Reserve:
<blockquote data-ct-non-breakable="true">
 “In the past 48 hours, it has become apparent that the US economy is weaker than the Federal Reserve initially believed.”
</blockquote>
The report further highlights that Fed Chair Jerome Powell reinforced this point, indicating a potential dovish shift in policy if inflation decreases as anticipated, aiming to cushion further economic downturns.
Related: <a href="https://cointelegraph.com/news/bitcoin-dominance-hits-58-amid-altcoin-stock-market-bloodbath">Bitcoin dominance hits 58% amid altcoin, stock market bloodbath</a>
<h2 data-ct-non-breakable="true" id="btc-dominance-shift">BTC dominance shift</h2>
On Aug. 5, BTC dominance, a ratio of the asset’s market capitalization to the rest of the crypto market, hit <a href="https://cointelegraph.com/news/bitcoin-dominance-hits-58-amid-altcoin-stock-market-bloodbath">a new yearly high of 58%</a> as crypto and stock markets crashed.
The shift in dominance percentage co-aligned with the sudden sell-off of Ether (<a href="https://cointelegraph.com/ethereum-price">ETH</a>), which fell by as much as 18% in two hours.
IG Markets analyst Tony Sycamore informed Cointelegraph that this collapse in market price amid a rise in BTC dominance reminds the market that crypto sits at the “pointy end” of the risk asset spectrum.
Magazine: <a href="https://cointelegraph.com/magazine/bitfinex-hacker-bitcoin-2024-senator-lummis-bitcoin-strategic-reserve-bill-cointelegraph-magazine/">Criminal at Bitcoin 2024, BTC Strategic Reserve Bill, and more: Hodler’s Digest, July 28 – Aug. 3</a>

Bitcoin on edge as economy falters: 10x Research report

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Cointelegraph

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