Markus Thielen: “Strategy’s BTC Sale Isn’t to Blame for Bitcoin’s Drop”

Markus Thielen, founder of 10x Research, stated that the main reason Bitcoin recently fell below the $60,000 level was not concerns about potential Bitcoin sales by Strategy, but rather that rising inflation in the US was leading institutional investors to exit spot Bitcoin ETFs.

According to Thielen, the market is misjudging the factors behind the current decline. Since the US April consumer price index (CPI) data came in above expectations on May 12th, there has been a net outflow of approximately $5.4 billion from spot Bitcoin ETFs. During the same period, Strategy became one of the few large buyers in the market, purchasing approximately $2 billion worth of Bitcoin. Therefore, Thielen argues that “the problem is not Strategy.”

10x Research predicts that the US annual inflation rate for May, to be released on Wednesday, could exceed market expectations of 4.2%, reaching 4.3%. If the data comes in above 4%, it could strengthen investor expectations that the Fed will keep interest rates high for an extended period or may raise them again. This, in turn, could continue to put pressure on risky assets.

On the other hand, Thielen noted that Bitcoin’s short-term technical indicators have entered the oversold region, and therefore, the possibility of a short-term recovery should not be ruled out. However, he warned that any potential rises may not be sustainable if inflation data continues to exceed expectations.

“Spot ETFs: The Biggest Indicator for Direction in Bitcoin”

Thielen also touched upon the liquidity conditions in the market, stating that there was a net outflow of approximately $1.7 billion from stablecoins last week, and the total outflow over the past month reached $5.5 billion. He also noted that the amount of open positions in Bitcoin futures had decreased significantly, indicating that capital outflow from the crypto market continues.

Thielen argued that the most critical indicator in assessing Bitcoin’s future direction is the institutional capital flowing into and out of spot BTC ETFs, stating that price movements are determined not by market narratives, but by institutional fund flows through ETFs.

*This is not investment advice.