Markus Thielen, CEO and Head of Research at 10X Research, believes that Bitcoin is currently in a confirmed bear market. The only question is how long it will last. His outlook suggests prices could head lower, citing a combination of poor market structure, underwhelming institutional flows, and macro factors that lack the necessary tailwinds.
Key Reasons for Bitcoin's Drop/Bear Market
Thielen presents several arguments as to why Bitcoin is dropping and why the market is bearish:
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Poor Market Structure & Capital:
Key Highlights:-
Missing Retail & Low Leverage: Retail activity (spot volumes) and high leverage have been consistently low, characterizing this as a Wall Street-led cycle without the necessary micro-structure support.
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Underperforming Institutional Inflows: Inflows to Bitcoin ETFs are lower this year, and much of the institutional investment is currently underwater, making it difficult for traders to secure bigger risk allocations for the next year.
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Price Capping: The increase in options trading is driving extensive call selling to extract yield. This activity effectively caps Bitcoin's price, as the focus is on harvesting premium rather than betting on an open-ended upside.
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Misleading Macro & Liquidity:
Key Highlights:-
Liquidity Narrative is Flawed: The popular theory that global M2 (money supply) will automatically pump Bitcoin is flawed, as the relationship is not linear and much of the reported rise in "global liquidity" was due to the US dollar weakening, not a net cash infusion.
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Negative Rate Cut Precedent: The Fed's third rate cut in a cycle has historically led to a pause, and in both 2019 and 2024, Bitcoin fell significantly in the following 30 days, suggesting more short-term pain.
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Recession Warning: The unemployment rate is now above its 12-month moving average, a rare historical signal that typically precedes a recession and a period of pain for risk assets before any major stimulus arrives.
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The Takeaway
Thielen stresses that the market depends on crypto-native liquidity (like stablecoin supply) which he views as "a lot more relevant" than broad macro metrics. Since the big shift needed to go from bearish to bullish is not evident and performance has not been there, it is difficult for Bitcoin to find its footing.
