The crypto market remains volatile after the recent massive price dip. A report from the analytical platform 10x Research reveals that US consumer borrowing has slowed down, which could affect the crypto market.
Further, data released by the Federal Reserve on Wednesday shows that the total outstanding credit rose to $8.9 billion in June.
Revolving debts, including those incurred by credit card users, declined by $1.7 billion, the lowest since early 2021. Meanwhile, non-revolving debts, such as student fees and automobile loans, increased to $10.6 billion.
10x Research believes this poor economic outlook threatens Bitcoin and the broader crypto market.
US Consumers Exceeding their Borrowing Capacity Could Influence the Crypto Market Negatively
According to recent data, credit defaulters increased in the US by 10.93% in the second quarter of 2024. Also, auto-loan defaults increased by 4.43%, the highest on record since 2012, implying that US consumers have exhausted their borrowing capacity.
The US consumer credit dropped from $11.3 billion to $8.9 billion, below the expected $10 billion. The rising credit default and negative credit card debt show a rapid decline in personal saving rates.
10x Research’s founder, Markus Thielen, says such weak consumer credit data is concerning. Thielen notes that these figures are significant to the crypto market since they affect fiat-to-crypto transactions. He also expressed concerns about the upcoming US elections and the slow US economy.
Additionally, the fading interest in artificial intelligence (AI) threatens the crypto market as both industries are closely correlated.
Notably, the Crypto Fear and Greed Index displays a value of 20, showing extreme fear and hesitation from traders and investors.
10x Research Reveals High Stakes for Bitcoin Traders
In a recent X post, 10x Research revealed that many of its subscribers sold their BTC within the $64,000-$68,000 price range. The firm said it anticipated a break from the $60,000-$70,000 range earlier. However, it has yet to establish a new and potentially lower range.
The Stakes Are High!!! Critical Dates for #Bitcoin Traders
👇1-14) Many of our 10x Research subscribers sold Bitcoin in the $64,000 to $68,000 range and are now waiting for favorable re-entry levels. We anticipated a break from the $60,000-$70,000 Bitcoin range, but a new,… pic.twitter.com/j36AxjNVip
— 10x Research (@10x_Research) August 8, 2024
The analysts also noted that recent market moves emphasize the need to be cautious. 10x Research notes that rather than buying the dip, investors pulled out funds from the BTC Spot ETFs, as witnessed in the recent massive outflows.
Furthermore, the company mentioned that the absence of buyers during this price dip raises concerns about the crypto market’s next direction.
It further revealed that Bitcoin attempted to rebound yesterday but faced significant resistance in the $56,000-$57,000 range. A Bank of Japan statement on a rate increase likely blocked Bitcoin’s rally.
Based on macroeconomic conditions, 10x Research predicts that Bitcoin will likely record a further price decline. According to the analysts, Bitcoin has shown vulnerability since mid-March and remains in a defined range. Due to crypto market volatility, they advise that a cautious approach is the best.
However, despite Bitcoin’s recent decline, analysts like Ali Martinez are bullish on its outlook in the coming days. According to Ali, Bitcoin is forming a bull pennant in lower timeframes, indicating a possible rally of 5% to $60,000.
Disclaimer: The opinions expressed in this article do not constitute financial advice. We encourage readers to conduct their own research and determine their own risk tolerance before making any financial decisions. Cryptocurrency is a highly volatile, high-risk asset class.
Our Editorial Process
The Tech Report editorial policy is centered on providing helpful, accurate content that offers real value to our readers. We only work with experienced writers who have specific knowledge in the topics they cover, including latest developments in technology, online privacy, cryptocurrencies, software, and more. Our editorial policy ensures that each topic is researched and curated by our in-house editors. We maintain rigorous journalistic standards, and every article is 100% written by real authors.
