As the world of cryptocurrency continues to evolve, new analysis suggests that Bitcoin (BTC) could face a retest of $20,000 and the United States could fail its plans for a “soft landing” on inflation. In a recent YouTube update, Cointelegraph contributor Michaël van de Poppe, founder and CEO of trading firm Eight, warned that the tide is due to turn for risk assets and the U.S. is “probably” headed for a recession.
Van de Poppe believes that the rebound seen in crypto and stocks this year may flip bearish and Bitcoin could put in 40% gains in January, but with a disappointing February a real possibility. He believes that the Federal Reserve’s interest rate hikes could lead to a continuation of this downwards trend in the markets. 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) is currently in the process of consolidating after dropping 13% since mid-2022, when it circled twenty-year highs.
Ahead of a less significant macroeconomic week, traders debated the potential for a BTC price pullback. A higher low would provide a better entry point for longs, as the bear market remains in play. Some bullish voices remained active however, with crypto and market education, analysis and prediction tool, IncomeSharks, noting that most bulls are still holding and not selling, with the stubborn bears still shorting driving the price up further.
It remains to be seen what the CPI data will show and how it will affect the markets. In the meantime, it is important to keep an eye on the U.S. dollar index (DXY) and be aware of the potential for a BTC retest of $20,000.
Source: cointelegraph.com