Venture capitalist and crypto investor Chris Burniske says that a downward correction is the most likely scenario for digital assets in the next market phase.
After a relatively long uptrend, crypto markets are probably due for a correction. Burniske says on social media that the macro situation is in a precarious spot. Positive economic data may encourage the Fed to keep interest rates higher for longer, while weak data may stir up talks of recession.
Risk assets like crypto need a “Goldilocks” economy, or one with moderate economic growth and relatively low inflation, to flourish. If numbers come in too strong, the Fed will have little reason to cut, especially if strong numbers mean inflation fears return. Too weak and we’ll return to recession talk, then cuts not strictly bullish for risk.
Last month, Burniske said that Bitcoin (BTC) could easily test prices below the $30,000 level. He expects a volatile path to get there, with fake outs, and it will take months to play out.
At the time of writing, BTC is trading for $42,852.