Bitcoin Faces Headwinds: A Deep Dive into the Current Downturn
Recent price action in Bitcoin is mirroring a pattern previously identified by 10x Research, suggesting a potential cyclical downturn. Support from both on-chain data and derivatives markets is weakening, and the current price levels are unfolding in a manner consistent with their earlier analysis.
What’s Driving the Current Dip?
The primary pressure on Bitcoin isn’t stemming from a single event, but rather a shift in broader macroeconomic conditions. Interest rate signals are becoming more hawkish, and global liquidity is tightening. This is compounded by notable outflows from bitcoin-focused investment products.
During the week ending November 3rd, Bitcoin funds experienced over $1 billion in net outflows. While some of this capital is flowing into other cryptocurrencies, the heaviest selling pressure is concentrated on Bitcoin’s spot market. This is evident in the underperformance of major coins, especially when contrasted with ethereum, which, while also facing pressure, hasn’t led the market decline to the same extent.
The trading community is responding to these signals. Large ETF redemptions, shrinking basis (the difference between the futures price and the spot price), and unusually thin order book liquidity during US trading hours are all contributing to a shift in strategy from “buying the dip” to “hedging” positions.
This represents an overall system reset, and the market is awaiting stabilization of capital flows before a clear direction emerges next week.
(Image: Bitcoin Price – Source: CoinMarketCap – as provided in original text)
Key Indicators to Watch:
Analysts emphasize the importance of monitoring three key areas: Liquidity, Basis, and Market Depth.
The initial step towards recovery will be an improvement in the depth of BTC and ETH trading pairs.A return to thicker order books, narrower spreads, and increased willingness of market makers to take on overnight risk will signal a potential turning point.
Looking ahead,monitoring Funding and Basis conditions is crucial. A return to neutral levels in both indicates a more enduring rebound than a short-lived price spike.tools like Kaiko’s dashboard and core trading platform are proving valuable for deciphering US market structure.
The direction of stablecoin supply is another vital indicator. Increasing net issuance of stablecoins often suggests a renewed influx of positive liquidity and price support. Conversely, stagnant or shrinking stablecoin supply, even during price increases, may indicate position covering rather than genuine demand, especially given the ongoing ETF outflows.
Analyzing these data points collectively will help distinguish between a genuine recovery and a “deceptive rebound” within an unstable capital surroundings.
10x Research’s Track Record
10x Research has established a reputation for accurate market analysis by integrating on-chain data, derivatives data, and macroeconomic factors. They correctly predicted the year-end market direction in 2022, 2023, and 2024.
Their latest report highlights the need for cooling funding rates, rebuilt market depth, and a reduction in realized loss pressure on the blockchain before a sustained rally can be expected. A simple morning price increase isn’t sufficient evidence of a true recovery.
Regarding Ethereum, a more stable market close is needed to restore basis balance. Larger-cap altcoins like Solana and XRP typically follow Bitcoin’s lead, making BTC’s order pairs a primary focus. This aligns with the continued downward trend in ETFs and fear indexes.
though, if liquidity deepens, fund outflows cease, and sentiment improves across all three data sets, this reset could evolve into a powerful recovery cycle. Discrepancies in these indicators, however, will likely prolong market volatility.
