Crypto Market Outlook For Feb-2023: Should You Be Ready for a Breakout or a Breakdown?
The cryptocurrency market as a whole, including Bitcoin, had a stellar January.
However, a modest stumble was seen in the market as February began, despite expectations that it would be another spectacular month. Bitcoin’s price has dropped below the highly acknowledged $23,000 threshold, while Ether’s value has dropped by 2.4% in the last twenty-four hours as of the time this article was written.
Shift In Risk Assets
As February approaches, there has been a proliferation of cryptocurrency market forecasts. Michael van de Poppe, a prominent crypto expert, has issued a caution that a shift in the market for risk assets is impending.
Van de Poppe warns that there is a mounting likelihood that the bullish trend observed in cryptocurrencies and stocks this year may revert to a negative trend. This comes as uncertainties loom regarding the impact of new macroeconomic data from the United States on market sentiment.
For instance, Bitcoin witnessed a 40% surge in January, however, like others, Poppe foresees a potential disappointment for the cryptocurrency in February. He asserts that the United States may likely experience a recession due to the extent of the Federal Reserve’s interest rate hikes.
In his words:
“I think that people should understand that there is no soft landing, that there is likely a continuation of this downward trend on the markets.”
The expert, Michael van de Poppe, now predicts a potential drop in Bitcoin’s price to around $20,000 in February. Despite previously confirming his bullish view on Bitcoin reaching $40,000, he now refers to this time of year as the “Bitcoin to $35-$40,000 season.”
If signs of a decline materialize, van de Poppe believes that a retest of the price between $20,000 and $21,000 may occur. The release of the January Consumer Price Index (CPI) statistics, set for February 14th, will be closely monitored.
If the results suggest decreasing inflation at a lower rate than predicted, they may be positive for the U.S. currency and bolster the crypto market. Alternatively, they may interrupt the market’s downward trend, he said.
Bitcoin Price In The Verge Of Another Breakdown
It’s been more than a month that Bitcoin has been trading below $20,000. In fact, the currency had even dropped to near $18,860.
At the time of reporting, Bitcoin is selling at $18,756 with a plunge of 1.96% over the last 24hrs.
Considering Bitcoin’s recent price movements, it is likely to form a short-term inverse head and shoulder pattern with a breakdown at $18,000. If Bitcoin forms an upward pattern, the immediate resistance will be around $18,800.
Meanwhile, the managing director at Midas Touch Consulting, Florian Grummes, believes that the flagship currency will fall below its support level of $18k and revisit $10k. And now, as the currency has lost its $19k area, it looks like soon BTC will hit $10k as per his prediction. Furthermore, he predicts that the worst-case scenario may lead to the asset falling to the $6k level because of the intense liquidity crisis.
Next Bitcoin Bull Run In 2024
However, on the bright side, he claims that once Bitcoin hits the bottom, the currency will explore new heights. Earlier, he had accurately predicted that the macroeconomic conditions will lead to a liquidity crisis and he had also said that Gold will outperform crypto.
At present, the global financial instability is getting worse day by day with an increased interest rate hike by the Fed and rising inflation rate. Hence currently the crypto market is struck in Crypto winter. This is the reason that Grummes is seen claiming that the US Dollar is the best investment during such a crisis.
Further, Grummes asserts that typically the life span of Crypto winter is 24 to 27 months and it’s been just a year that crypto market entered winter, there is still a year for bull market. As per his calculation, the next bull run for Bitcoin might be expected around May 2024, the next Bitcoin halving.
On the other hand, Grummes believes that the central government is against Bitcoin and doesn’t wish BTC to succeed which is hampering its growth.