The cryptocurrency market remains highly volatile as major analyst firms revise their outlooks amid shifting macroeconomic signals and on-chain activity. Recently, Matrixport and 10X Research, led by Markus Thielen, have issued bearish short-term forecasts for both Ethereum (ETH) and Bitcoin (BTC) — diverging from more optimistic projections by institutions like Standard Chartered.
This article breaks down the latest market analysis, explores key indicators behind the predicted downturns, and examines what these signals mean for traders navigating the current crypto landscape.
Ethereum Losing Momentum: Gas Fees Signal Weak Demand
According to Matrixport, Ethereum is showing clear signs of weakening momentum. In a recent tweet, the firm emphasized that declining gas fees on the Ethereum network are a critical red flag — indicating reduced user activity and speculative interest.
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Historically, rising gas fees correlate with increased network congestion, often driven by surges in decentralized finance (DeFi) usage, NFT minting, or speculative trading. Conversely, falling fees suggest waning demand.
“As we showed a week ago and also in our Matrix on Target report, #Ethereum is losing upside momentum as indicated by the drop in gas fees,” Matrixport stated. “We also warned that the Ethereum ETF approval is at odds and after the Dencun upgrade, an important catalyst has been removed.”
The Dencun upgrade, implemented in early March 2024, introduced proto-danksharding to improve scalability and reduce Layer-2 transaction costs. While technically successful, it appears the market had already priced in this development. With no major upcoming upgrades or regulatory catalysts on the immediate horizon — especially uncertainty around spot ETH ETF approvals — investors may be shifting focus back to Bitcoin.
This stance contrasts sharply with Standard Chartered, which maintains that a spot Ethereum ETF could still be approved by May 2025, potentially pushing ETH toward $8,000 by year-end.
Why Matrixport Recommends Shorting ETH
Given the fading momentum and lack of near-term catalysts, Matrixport advises traders to consider hedging Bitcoin long positions with Ethereum shorts.
Here’s why:
- No Clear Regulatory Clarity: Unlike Bitcoin, Ethereum’s classification as a security remains legally ambiguous in the U.S., creating ongoing regulatory risk.
- Diminished Speculative Activity: Lower gas fees reflect reduced DeFi and NFT activity — key drivers of past ETH rallies.
- Market Rotation Back to BTC: As uncertainty grows, capital appears to be rotating from altcoins back into Bitcoin, seen as a safer store of value during corrections.
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While Ethereum’s long-term fundamentals remain strong — particularly with continued development in scaling solutions and ecosystem innovation — short-term technical and sentiment indicators point to further downside pressure.
Bitcoin Outlook: ETF Inflows Slow, Correction Risk Rises
While Markus Thielen, founder of 10X Research and analyst at Matrixport, remains structurally bullish on Bitcoin over the long term, he warns of an imminent correction if spot Bitcoin ETF inflows fail to rebound.
Data from Farside Investors reveals a notable slowdown in net inflows during mid-March 2025:
- March 11: $505 million
- March 12: $1.045 billion
- March 13: $683 million
- March 14: $132 million
- March 15: $198 million
The sharp decline in daily inflows — especially over the weekend — coincided with a pullback in Bitcoin’s price from its peak near $73,000 earlier in the month.
Thielen notes that while Bitcoin was holding around $67,000 at the time of his report, the real test would come during U.S. market hours on Monday and Tuesday. Strong institutional buying through ETFs typically stabilizes prices; weak inflows, however, could trigger further selling.
BTC Could Drop to $59,035: 10X Research Warning
In a report cited by CoinDesk, 10X Research outlined a bearish scenario where Bitcoin could retrace to **$59,035** — approximately a 10% drop from its $67,000 level at the time.
This projection is based on:
- Cooling retail and institutional demand
- Seasonal trends showing post-halving corrections
- Technical reversal patterns in volume and momentum indicators
“Although unpopular, after significant price volatility, fund inflows are expected to slow,” Thielen explained. “According to our reversal indicators, a pullback to $59,035 seems more likely.”
Such a move wouldn’t necessarily signal a breakdown in Bitcoin’s bull cycle — many analysts view this as a healthy correction following the euphoria surrounding ETF approvals and pre-halving speculation.
Key Market Themes for 2025: What Traders Should Watch
As we progress through 2025, several macro and micro factors will shape crypto price action:
1. Spot ETF Flows
Continued monitoring of daily net inflows/outflows for U.S.-listed spot Bitcoin and potential Ethereum ETFs will be crucial. Sustained inflows support bullish momentum; stagnation or outflows often precede corrections.
2. On-Chain Activity
Metrics like transaction count, active addresses, and gas fees provide real-time insight into network health and user engagement — essential for gauging altcoin strength.
3. Macroeconomic Conditions
Interest rate decisions, inflation data, and risk appetite in traditional markets directly impact crypto valuations. A dovish Fed could reignite rallies; hawkish tones may extend sell-offs.
4. Bitcoin Halving Aftermath
The April 2024 halving reduced new supply issuance by 50%. Historically, this has led to major bull runs 6–12 months later — but interim volatility is common.
Frequently Asked Questions (FAQ)
Why is Matrixport suggesting shorting Ethereum?
Matrixport cites declining gas fees, lack of near-term catalysts like ETF approval, and fading speculative interest as reasons for bearishness on ETH. With Dencun upgrade benefits already priced in, upside momentum has stalled.
Is Bitcoin still bullish despite the predicted drop?
Yes. The forecasted drop to $59K is viewed as a short-term correction rather than a trend reversal. Long-term bulls argue that post-halving cycles historically favor higher prices over time.
How reliable are ETF inflow metrics for predicting price?
Very reliable in the current market environment. Since the launch of spot Bitcoin ETFs in January 2024, price movements have closely correlated with institutional buying patterns.
What happens if Ethereum ETFs are rejected?
A rejection would likely trigger further downside for ETH, potentially accelerating capital rotation into Bitcoin. It could also delay broader altcoin recovery until sentiment improves.
Can on-chain data predict market reversals?
Yes. Metrics like gas fees, active addresses, and exchange net flows often shift before price does. For example, falling gas fees preceded previous ETH pullbacks in 2021 and 2022.
Should I sell my crypto now based on these warnings?
Not necessarily. These analyses highlight risks, not certainties. Investors should assess their risk tolerance, diversify holdings, and consider dollar-cost averaging instead of timing the market.
Final Thoughts: Navigating Volatility with Strategy
The current phase of the crypto cycle demands caution and strategic positioning. While long-term fundamentals for both Bitcoin and Ethereum remain robust, short-term headwinds — from slowing ETF flows to fading on-chain activity — suggest increased volatility ahead.
Traders should focus on risk management, use data-driven insights, and remain flexible in response to changing market dynamics.
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Whether you're hedging with ETH shorts or preparing for a potential BTC dip, informed decisions rooted in on-chain metrics and institutional flow analysis offer the best path forward in today’s complex digital asset landscape.
Core Keywords: Ethereum, Bitcoin, ETF inflows, gas fees, spot ETF, market correction, crypto analysis, 10X Research