Research firm 10X Research has set a potential target price of $63,000 for Bitcoin and expects it to recover its upward trend. Additionally, after dominating the trading volume in South Korea, meme coins have shown signs of weakness. 10X Research believes that these competitive and meme coins may have reached a short-term peak.
Reasons for the cryptocurrency market downturn?
According to the latest report by 10X Research, several factors are to blame for the recent decline in Bitcoin over the past two days. It points out that Bitcoin reached a new high and then fell below the previous day’s low, forming a bearish outside day pattern, indicating a potentially highly volatile and polarized trend.
Disappearance of trading signals and excessive MicroStrategy gains
10X Research states that its own trading signals have been closed, and other sectors of the market have become more unpredictable. MicroStrategy’s stock price has risen 60% to 90% above its reasonable value compared to its Bitcoin holdings and the magnitude of Bitcoin’s retracement. Morgan Stanley shares a similar view, expressing concerns about bubble risks as MicroStrategy issues another $500 million convertible bond with a conversion price of up to $2,327.
Bitcoin may fall to $63,000
Although Bitcoin ETFs still maintain net inflows, Bitcoin has been unable to sustain its upward momentum during most of the U.S. trading sessions, and March 14 saw the lowest net inflows since March. Considering these reasons, 10X Research sets $63,000 as a potential target price and expects a recovery in the upward trend.
ETH not so optimistic
The report also mentions that Ethereum has recently benefited from the Dencun upgrade, but it still needs to address the weakness in on-chain fee revenue. Despite Ethereum’s impressive performance in network fees during the DeFi boom in 2020 and the NFT craze in 2021, the current coin price seems to be disconnected from the sluggish fundamentals, as Ethereum’s on-chain metrics have not been able to match the price.
Furthermore, compared to Bitcoin, the outlook for Ethereum ETF approval is pessimistic, with analysts estimating a possibility of only 30% approval, which may further weigh on Bitcoin after the positive effects of the upgrade fade.
Short-term peak for competitive and meme coins
Bitcoin’s strong performance in recent weeks has fueled the meme coin frenzy. 10X Research points out that Shiba Inu (SHIB) has become the largest traded coin in South Korea for seven consecutive days. However, as the overall market declined, trading volume for meme coins in South Korea also decreased. 10X Research believes that the frenzy surrounding competitive coins closely correlates with the price surge and has likely reached a short-term peak, indicating that the market will go through a further consolidation period.