Venture capitalist and crypto investor Chris Burniske says a downward move is the most likely scenario for digital assets in the next market phase.
Burniske say on the social media platform X that the crypto markets are probably due for a correction after a relatively long upward trend.
“It’s been a solid many month run for crypto, which leads CT (crypto Twitter) to expect more of the same – lost my crystal ball, please DM if you find it, but consolidation still seems like the most to me probable path, shouting as we can against that reality.
Burniske too say that the macro situation is in a precarious situation. According to the crypto investor, positive economic data could prompt the Fed to keep rates “higher for longer,” while weak data could fuel talk of a recession.
The investor, formerly a crypto leader at ARK Invest, says risky assets like crypto need a “Goldilocks” economy, or one with moderate economic growth and relatively low inflation, to thrive.
“Risk assets want a Goldilocks economy, not too strong and not too weak. If the data is too strong, the Fed will have little incentive to cut spending, especially if strong data means a return of inflation fears (in my opinion, they would rather remain restrictive for too long than see inflation rear its ugly head again).
Too weak and we return to recession talk, and then cuts that are not strictly bullish because of the risk. Given the recent parabolic run in tech and crypto, as bonds experience increased volatility, the rest of the first half will be interesting.”
Last month, Burniske said Bitcoin (BTC) could easily test prices below $30,000.
“We wouldn’t be surprised if we test the mid-to-high $20,000s before all is said and done and we can actually make a move towards previous all-time highs. The path to get there will be fleeting – expect fakeouts, and it will take months to play out.
As always, patience is your friend. If I’m right, other names will drop more than BTC in percentage terms.”
At the time of writing, BTC is trading at $42,852.
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Featured image: Shutterstock/Natalia Siiatovskaia/Brita Seifert