Bitcoin (BTC) could face a retest of $20,000 and the United States fail its plans for a “soft landing” on inflation, new analysis says.
In a YouTube update on Feb. 5, Cointelegraph contributor Michaël van de Poppe, founder and CEO of trading firm Eight, warned that the tide is due to turn for risk assets.
U.S. "probably" headed for recession — Van de Poppe
Amid confusion over how incoming U.S. macroeconomic data may affect market sentiment, there is an increasing chance that the rebound seen in crypto and stocks this year may flip bearish, Van de Poppe says.
Bitcoin, for example, put in 40% gains in January, but like some others, he believes that a disappointing February is a real possibility.
“I think that people should understand that there is no soft landing, that there is likely a continuation of this downwards trend on the markets,” he said about the longer-term status quo.
The U.S., Van de Poppe continued, would “probably have” a recession thanks to the extent of the Federal Reserve’s interest rate hikes.
Should a comedown begin to show itself, for BTC/USD, a potential retest target lies between $20,000 and $21,000.
Much depends on the outcome of Consumer Price Index (CPI) data for January, due Feb. 14. Should it show that inflation is slowing less than expected or even disrupting that downtrend, the results could benefit the U.S. dollar while taking the wind out of the risk asset rally.
The U.S. dollar index (DXY), as Cointelegraph reported, is currently in the process of consolidating after dropping 13% since mid-2022, when it circled twenty-year highs.
“In this case, the next week will probably bring a case of the dollar starting to rally, or the week after with CPI and PPI, so that’s why it’s very important to keep an eye on this chart,” Van de Poppe added.
Bitcoin bears "stuck in cash"
Ahead of a less significant macroeconomic week, meanwhile, others continued to debate the potential for a BTC price pullback.
Related: Bitcoin clings to $23.5K as trader says BTC ‘identical’ to 2020 breakout
A higher low would provide a better entry point for longs, popular trader Crypto Tony suggested, arguing that the bear market remained in play
"Even if this was the start of a bull market, and personally I am still in the camp we are not You can still get a good safer entry on the higher low pullback," he told Twitter followers on the day.
Some familiar bullish voices were as active as ever, however, including cypto and market education, analysis and prediction tool, IncomeSharks.
"People still seem to be confused as to why it's been up only," it summarized in a tweet on Feb. 3.
BTC/USD traded at around $23,400 at the time of writing, according to data from Cointelegraph Markets Pro and TradingView, with around 15 hours until the U.S. weekly close.
"Just remember majority of bulls are still holding and not selling. Bears are stuck in cash. Slowly but surely the bears are caving in and buying. The stubborn ones keep shorting driving price up further."
The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.