With Bitcoin (CRYPTO: BTC) down 11% over the past week, a 10x Research report advises caution considering the sell-off ahead of the Bitcoin halving.
What Happened: According to the report, Bitcoin is at a critical juncture. The recent drop, which occurred within a narrowing symmetrical triangle, suggests that whichever side the price levels break could lead to a quick +/-10% follow-through.
Bitcoin’s first critical stop level sits at around $60,026, while the next would be $51,536. 10x Research had predicted two months ago, when Bitcoin traded at $52,000, that it would peak at $68,000 a few days ahead of the Halving.
The report states that when Bitcoin prices close lower than its monthly upper Bollinger level ($68,695), the upside momentum might also be at risk during parabolic rallies.
It draws parallels to past performance, noting that when Bitcoin traded below its upper monthly Bollinger band in April/May 2021, it corrected from $60,000 to the low $30,000 rather quickly.
Also Read: Bitcoin, Ethereum, Dogecoin Plunge, $878M Liquidated: ‘Just Set Alerts At $60,000 And $74,000 And Walk Away,’ Says Crypto Expert
10x Research suggests setting a stop loss level at 62,500 when 61,000 gets tested. A break below this level could see the market correcting materially lower.
They also adopt a cautious stance on the post-Halving period, highlighting the lack of historical evidence to support immediate bullishness. While crypto has become a legitimate asset class, deep and prolonged corrections can still occur. Some people claim that there would be a pre-Halving sell-off, but there is no data supporting this, and many traders are nervous that it could occur.
Bitcoin miners could potentially sell $5 billion of Bitcoin inventories after the Halving, which could adversely affect altcoins. This caution was validated as many popular altcoins experienced significant declines over the last weekend.
What's Next: The influence of Bitcoin as an institutional asset class is expected to be thoroughly explored at Benzinga's upcoming Future of Digital Assets event on Nov. 19.
Read Next: Peter Schiff Predicts Bitcoin ETFs Will Lead To Its ‘Biggest Crash Ever’
Image: Pixabay
