Following the recent sharp sell-off in the cryptocurrency market, a noteworthy assessment of Bitcoin’s short-term outlook has emerged. An analysis published by the research firm 10X Research states that the recent decline stemmed not from aggressive short positions in the futures market, but directly from selling pressure in the spot market.
According to the company’s analysis, market participants have been pointing the finger at the wrong party for Bitcoin’s decline over the past month. While the prevailing view is that the price drops were triggered by short sellers, data reveals that the primary selling pressure came from spot market investors.
10X Research pointed to some key indicators supporting this view. According to them, Bitcoin funding rates rose by 0.9 points last week, reaching 5.7 percent on an annualized basis.
During the same period, the size of open positions in futures markets decreased by $3.5 billion to $21 billion. According to analysts, this indicates that the market decline is not due to massive short selling, but rather to investors directly selling Bitcoin.
The research firm also noted that technical indicators suggest Bitcoin has entered the oversold zone. Following the recent rapid decline in value, the market is open to short-term buying reactions, and therefore a recovery could be seen at the beginning of the week.
However, 10X Research cautioned that investors should not interpret the potential upward movement as the beginning of a new bull market. According to the company, the expected recovery may be more of a short-term relief rally, as indicated by technical indicators.
Experts say that Bitcoin’s performance in the coming days will be shaped by both investor behavior in the spot markets and macroeconomic developments. Therefore, the market needs more data to understand whether a potential rise will turn into a permanent trend reversal.
This is not investment advice.
