Why Markus Thielen Says Bitcoin's Pain Isn't Over Yet | Markets Outlook

Markus Thielen, speaking with Bitcoin trading around $58,500, argues there is no real buyer in the market at present. He identifies MicroStrategy as effectively the only meaningful buyer year to date, with approximately $13 billion in purchases, but notes that buying has slowed because the company requires its stock to trade at roughly 1.2 times net asset value before issuing more shares to fund additional acquisitions.

ETF flows have turned sharply negative, with Thielen citing approximately $7 billion in total outflows since mid-May, when an inflation report triggered selling. He says the average ETF buyer is significantly underwater and tends to cut losses around the $60,000 level, adding to downward pressure. These two dynamics, the absence of MicroStrategy buying and continued ETF redemptions, are the core structural reasons he sees no near-term floor.

Thielen's Elliott Wave analysis maps five waves from the end of 2022 to the cycle high, with a wave C target around $50,000. He notes that a counter-trend rally reached approximately $82,000 to $83,000, within his expected $80,000 to $90,000 window. He ties the January turning point to market expectations that Trump would nominate Kevin Warsh as Fed chair, which he says caused gold to peak and Bitcoin to begin a leg lower around that time. He has since revised his downside target to $46,000 to $47,000, below the earlier $50,000 figure.

He expects the bearish period to last until around September, with a potential bottom sometime in Q4, followed by a rally back to $60,000 to $65,000, representing roughly a 30 percent move. He views a break below $50,000 as a buying opportunity but cautions that a sustained recovery likely requires the Fed to turn more dovish. Fed hawkishness combined with rising inflation expectations are the key macro headwinds he identifies. Although July historically shows approximately 9 percent positive performance for Bitcoin, Thielen sees no real catalyst to drive that outcome this year.

He draws a parallel to the 2022 to 2023 bear market, noting that after the Three Arrows Capital and Terra Luna collapse it took roughly nine to eleven months after the bottom for sentiment to turn bullish, with the Grayscale SEC ruling in late August 2023 serving as the catalyst when Bitcoin was at $30,000. He suggests the current cycle is following a similar pattern but taking longer to play out, and that even after a price bottom, sentiment recovery and broad recognition of a new bull market could take additional time.

Thielen has been bearish on Ethereum since the summer of last year and sees no reason to change that view. He points to several structural problems: stablecoin issuance growth has occurred mostly on Tron rather than on Ethereum, the net staking yield of roughly 2 to 2.5 percent is unattractive compared to the 10-year Treasury yielding above 4 percent, and the arbitrage between near-zero traditional finance rates and higher crypto yields that drove Ethereum demand in the prior bull market no longer exists. He also argues that even if on-chain activity on Ethereum increased, little value would accrue to token holders, comparing the network to a public good like a street with no tolls. He views the fact that the biggest Ethereum bulls from the last cycle have already disengaged as a significant negative signal.

On Hyperliquid, Thielen's firm published a report assessing the HYPE token as overvalued above $72. He argues that trading volumes on the platform have not materially increased, buybacks are not strong enough to justify elevated valuations, and reaching $100 per token is unlikely given current volume multiples. He describes exchange tokens broadly as among the worst assets to hold when trading activity is low, and attributes whatever momentum Hyperliquid retains to investors having few other narratives and needing to deploy capital somewhere.

Thielen notes that more than $100 billion in token unlocks have flooded the crypto market over the last 18 months, adding persistent supply pressure. In the current environment he describes selling calls against Bitcoin positions to generate yield and going short on crypto service providers as viable tactical strategies.