Markus Thielen, the founder of 10X Research, has warned that Bitcoin faces a “crucial two-week test” that will likely define the market’s direction for the summer. This short-term window centers on the upcoming June Consumer Price Index (CPI) report and the subsequent Federal Reserve meeting.
Meanwhile, Bitwise Chief Investment Officer Matt Hougan has identified “apathy” as the primary risk to the asset class, noting that crypto is shifting from a momentum trade into a difficult contrarian bet.
The urgency stems from a significant divergence between traditional markets and digital assets. While the Nasdaq-100 is up 43% year-over-year, Bitcoin has struggled to maintain its footing. As of June 3-4, 2024, Bitcoin is down 24% year-to-date, reflecting a broader cooling of investor interest.
This lack of enthusiasm is further evidenced by significant capital flight, as major crypto funds recorded $4.21 billion in outflows over a recent three-week period.
According to Matt Hougan, Bitcoin’s main hurdle isn’t a technical failure but a lack of momentum that has led to investor indifference. When major coins stagnate, it becomes harder for advisors to justify the asset to clients. This sentiment is fueled by heavy losses across the board. During the June 3-4 period, Ethereum fell 36%, Solana dropped 40%, and XRP declined by 32%.
Markus Thielen warns of cyclical risks and historical drawdown patterns
Markus Thielen of 10X Research has established a track record for timing market shifts, having called the Bitcoin bottom in late October 2022. The firm previously projected a cycle top near $125,000 in early July 2023, a period when Bitcoin actually peaked at $126,000.
These historical data points lead the firm to suggest that while long-term targets remain high, the immediate path remains fraught with liquidity risk.
The firm’s long-term outlook remains bullish, with predictions that Bitcoin could reach $122,000 by February 2025 and $200,000 by the end of that year. However, Markus Thielen warned that history points toward a potential 60% drawdown tied to the 2026 US midterm election cycle. Understanding these cycles is why Bitcoin traders prioritise the 200-day moving average to identify psychological support during periods of extreme volatility.
Institutional interest currently appears to be waiting for a macro-economic catalyst or regulatory clarity to break the current cycle of apathy. Prediction market Polymarket currently assigns only a 5% probability to the passage of the “Clarity Act.” Without such a trigger, Bitcoin remains sensitive to the results of the June CPI report and the Federal Reserve’s stance on interest rates.
Market performance and the shift toward contrarian investing
Matt Hougan observes that while the “majors” like Bitcoin and Ethereum struggle, select smaller assets are showing surprising resilience. For instance, Hyperliquid has risen 72% in a month, while Zcash and Stellar posted gains of 50% and 44% respectively. This suggests that capital is becoming more selective, moving into niche opportunities rather than the broad market.
This internal market rotation indicates that crypto is no longer moving as a single, unified block. As Bitcoin signals indicate shifting market structure, investors are being forced to decide if the current dip represents a buying opportunity or a structural decline. Hougan’s assessment of apathy suggests that until momentum returns, only those with a high tolerance for contrarian positions are likely to stay engaged.
Ethereum and altcoin targets amid liquidity concerns
The forecast for Ethereum also remains ambitious despite the current year-to-date losses. 10X Research expects Ethereum to climb toward $9,000 by early 2026, even though it faced a 36% decline in early June. This high target implies a significant recovery is necessary once the current two-week liquidity test concludes and the Federal Reserve provides more clear guidance on the monetary environment.
Ultimately, the next 14 days act as a binary lever for the digital asset market. A favorable inflation report could reignite the momentum trade that Matt Hougan says is currently missing. Conversely, if the Fed remains hawkish and the CPI data disappoints, the “apathy” currently plaguing the market could deepen, potentially leading toward the larger drawdowns Markus Thielen has identified in historical election cycles.
