Bitcoin's recent drop below $60,000 is primarily linked to institutional sell-offs via spot bitcoin ETFs, rather than Michael Saylor's Strategy, according to Markus Thielen of 10x Research. The potential for a market rebound may depend on the upcoming consumer price index (CPI) data, he added.

Key Insights:

  • According to 10x Research's Markus Thielen, institutional selling through bitcoin ETFs was the main factor behind the decline below $60,000, triggered by surging inflation reports.
  • Since the April U.S. CPI report released on May 12, U.S.-listed bitcoin ETFs have seen net redemptions of $5.4 billion.
  • Thielen warned that if the May CPI data releases above 4%, bitcoin's recovery could be short-lived.

The downturn of bitcoin, which fell to BTC$63,871.14 below the $60,000 mark, is seen less about Strategy’s actions and more about rising inflation, as suggested by Thielen.

In a report published on Monday, Thielen, the founder of 10x Research, communicated to clients that the reasons behind the cryptocurrency's recent sell-off have been misinterpreted. While the market focused on Strategy’s initial bitcoin sale since 2022 and the implications of potential further sales, the more significant factor has been substantial institutional selling through bitcoin ETFs.

Following the April inflation report's unexpectedly high results on May 12, U.S.-listed bitcoin ETFs experienced approximately $5.4 billion in net redemptions, while Strategy acquired around $2 billion in bitcoin during the same timeframe, positioning itself as one of the few major buyers in the market.

Thielen remarked, "The market has misdiagnosed this selloff. Strategy is not the problem."

Bitcoin ETF flows since May 2026 (SoSoValue)

Thielen emphasized the importance of the upcoming CPI report for May, indicating it could dictate whether bitcoin's recent downturn will worsen or stabilize.

The model from 10x predicts an annual inflation rate of 4.3%, which is higher than the previous month's 3.8% and above Wall Street's estimate of 4.2%. If the inflation figure exceeds 4%, it could raise concerns about the Federal Reserve maintaining higher interest rates for an extended period or even considering further hikes.

This scenario would likely be unfavorable for risk assets. Earlier in the year, markets anticipated multiple rate cuts; however, a series of inflation and labor market reports exceeding expectations have led traders to reassess, now contemplating the possibility of rate hikes instead of cuts.

Although bitcoin seems technically oversold following its recent drop, Thielen cautioned against interpreting a brief bounce as an indication of a lasting recovery. He anticipates a potential relief rally early in the week, but if inflation surprises on the high side, that rally will likely diminish.

Moreover, the overall flow dynamics remain weak, with stablecoins experiencing net outflows of about $1.7 billion last week and $5.5 billion over the month, suggesting capital is exiting the crypto market. Additionally, bitcoin futures open interest has decreased significantly as traders have reduced their exposure.

Thielen stated that ETF flows will be a crucial indicator for predicting bitcoin's next movement. "Institutional ETF flows are driving price," he noted. "Follow the money, not the narrative."

For further insights: Bitcoin's slide has no single cause. AI, tech IPOs, quantum, Strategy sale all play a role, NYDIG says