In a YouTube update on February 5, Cointelegraph contributor Michael van de Poppe, founder and CEO of trading firm Eight, warned that the tide is set to turn for risky assets.
The United States is “probably” headed for recession – Van de Poppe
Amid confusion over how incoming US macro data will affect market sentiment, Van de Poppe says there is a growing chance that the rebound seen in cryptocurrencies and stocks this year will turn bearish.
For example, Bitcoin saw a 40% gain in January, but like some others, a disappointing February is believed to be a real possibility.
“I think people have to understand that there is no soft landing, and that this downtrend in the markets is likely to continue,” he said of the long-term status quo.
Van de Poppe added that the US will “likely” suffer a recession thanks to higher interest rates by the Federal Reserve.
If comedy starts to show itself, for BTC/USD the potential retest target is between $20,000 and $21,000.
Much depends on the result of January’s CPI data, due on February 14th. If it shows that inflation is slowing less than expected or even disrupts this downward trend, the results could benefit the US dollar as the wind is lifted from rising asset risk.
The US Dollar Index (DXY), as Cointelegraph reported, is currently in the process of consolidating after falling 13% since mid-2022, when it was round to its highest levels in twenty years.
“In this case, the next week is likely to bring a situation where the dollar starts to rise, or the week after that with the CPI and the PPI, so it is very important to watch this chart,” Van de Poppe added.
US Dollar Index (DXY) chart in the form of a one-day candle. Source: TradingView
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Bitcoin ‘stuck in cash’
Meanwhile, others discussed the possibility of a decline in the Bitcoin price ahead of a less significant macroeconomic week.
Related: Bitcoin Holds on to $23.5K as Trader Says BTC Is ‘Equal’ to 2020 Breakout
A higher drop would provide a better entry point for long positions, suggested popular Crypto trader Tony, arguing that the bear market is still in action.
“Even if this is the start of a bull market, on a personal level, I’m still in the camp we’re not. You can still get a good, safer entry on the higher low pullback.”
Some familiar rising voices have been active as ever, including crypto and market education, analysis and forecasting tool, IncomeSharks.
It was summed up in a Feb. 3 tweet: “People are still confused as to why this is just the case.”
BTC/USD is trading around $23,400 at the time of writing, according to data from Cointelegraph Markets Pro and TradingView, with about 15 hours until the weekly close in the US.
“Just remember the majority of the bulls are still holding and not selling. The bears are stuck in cash. Slowly but surely, the bears give up and buy. The stubborn keep shorting which drives prices up even more.”
