The recent surge in Bitcoin's price may be short-lived as inflows into new spot Bitcoin exchange-traded funds (ETFs) show signs of slowing down, according to crypto research firm 10X Research.
The launch of these US-based Bitcoin ETFs in January was met with significant investor enthusiasm, with a record $2.6 billion flowing into the funds in the week ending March 15th. However, the buying momentum appears to be fading, raising concerns about a potential correction in Bitcoin's price.
ETFs: Fueling the Rally, But Can They Sustain It?
Data shows that the bulk of the inflows occurred early in the week, coinciding with Bitcoin's climb to new all-time highs near $74,000. As ETF inflows tapered off on Thursday and Friday, Bitcoin's price took a sharp turn, dropping below $65,000 over the weekend.
Source: twitter.com/BitMexResearch
Markus Thielen, founder of 10X Research, believes the coming week will be crucial. "The real test will come Monday and Tuesday," he wrote in a report. "If ETF inflows disappoint, the correction in Bitcoin's price could continue."
Read more: Binance CEO Bullish on Bitcoin, Predicts Price to Surpass $80,000 by Year-End
A 10% Correction on the Horizon?
Bitcoin broke its uptrend, falling to $65,000 over the weekend | Source: 10X Research
10X Research suggests that a pullback to $59,035, representing a further 10% drop from current levels, is a possibility. This scenario is based on the firm's "reversal indicators" and could offer better entry points for investors with a higher risk tolerance.
Bull Market Not Over, But a Temporary Dip Possible
Despite the potential for a correction, 10X Research maintains a bullish outlook on Bitcoin's long-term prospects. "We can still argue that Bitcoin will climb materially higher during the next few months as this bull market will likely continue," Thielen stated. A sustained recovery above $70,000, he added, could pave the way for even higher prices in the future.
The coming days will be closely watched by investors as they gauge the impact of waning ETF inflows on Bitcoin's price. While a correction might be on the cards, the overall sentiment suggests a continuation of the broader Bitcoin bull market.
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Disclaimer: This response provides information based on available data and general analysis. It does not constitute financial advice. Always perform your own due diligence and consult with a professional financial advisor before making investment decisions.