Bitcoin price forecasts still favor lower macro lows as traders brace for US inflation data and renewed Japan-driven currency volatility. BTC starts the second week of February still on the defensive after last week’s sharp drawdown, with traders increasingly eyeing a deeper retracement toward $60,000 — and even $50,000 — before a durable macro bottom forms. Market forecasts agree that Bitcoin price action has not yet put in a reliable long-term bottom.

CPI week comes as markets lose faith in Fed rate cuts in March. US dollar strength begins to fade as analysts eye a potential rerun of 2021 for Bitcoin-dollar correlation. Japan’s election turns heads, with analysis seeing a weaker yen and crypto headwinds to come. Bitcoin miners send large amounts to exchanges as the dust settles on the snap downside.

Bitcoin continues to trade above $70,000 as the week gets underway, but traders are anything but bullish on the short-term BTC price outlook. Data shows a lack of volatility around the weekly close, with BTC/USD staying around 20% higher versus its 15-month lows from last week. In an X thread covering lower time frames, trader CrypNuevo warned that the current relief may end up as a manipulative move to liquidate late short positions.

The intention to push price up first would be to hit the short liquidations that exist between $72k-$77k mainly. But this move is just a guess. What we're really anticipating here is the long wick getting filled at least 50% of it in the next weekly candles. CrypNuevo implied that the lows could see at least a partial retest in the short term. It could be an immediate wick-fill. But in the case of having a move up first, then it could probably take around 5-8 weekly candles to get filled.

At the weekend, there was a broad consensus that price would make new macro lows in the future, and that these could take BTC/USD to $50,000 or lower. Traders are skeptical that this is the bottom. Historically, Bitcoin drops 80% during its bear market, suggesting a potential near $40,000. After such a volatile few weeks, price will attempt to start ranging at some point. With this recent spike in volatility and big retrace yesterday, there's a good chance we are hitting that point about now. Volatility may slowly come off a bit again, forming a range from which to reassess opportunities.

The macro focus is back on US inflation data this week as wild gyrations in precious metals settle. The January print of the Consumer Price Index (CPI), due Friday, forms the highlight and will follow various US employment data releases. Earnings season is also in full swing, and macroeconomic uncertainty is elevated. President Donald Trump's pick for the new Chair of the Federal Reserve, Kevin Warsh, is thought to be notionally opposed to easing financial conditions, which has already weighed on risk-asset performance.

Markets thus have little faith in interest rates going lower at the Fed’s next meeting in mid-March, even if Warsh is only due to take over in May. Currently, odds are at 82% for rates to stay at current levels. Commenting on the week’s outlook, analytics resource Mosaic Asset Company pointed to persistent US inflation statistics as a reason for a more hawkish Fed and associated market nerves.

The combination of stronger economic growth and stubbornly high core inflation might start casting doubt on the interest rate outlook across the yield curve. As the week began, gold returned to the $5,000 mark, while US stocks futures joined Bitcoin in a relief bounce off Friday’s lows. Another major focus is the US dollar, which is becoming an increasingly important potential volatility catalyst for both Bitcoin and the broader risk-asset market.

The US dollar index (DXY), which enjoyed a relief rally following a trip to multiyear lows near 95.5 in late January, is failing to reclaim levels above 98. A strong dollar tends to result in pressure for Bitcoin, and while the correlation has undergone many changes in recent years, the long-term trend may provide bulls with a more reliable tailwind. Analyst Aksel Kibar highlighted that the DXY is holding support but is at a critical level for the long-term trend. It could offer a great trade setup soon, irrespective of direction.

Kibar noted that DXY might be breaking out of a ten-year trading channel to the downside, but more data would be necessary to confirm this. An alternative perspective comes from Henrik Zeberg, chief macro economist at a crypto market insight company. He likened the current relationship between BTC and DXY to early 2021, around ten months before BTC/USD saw the blow-off top in its last bull market.

Far from breaking down, DXY could actually be at the start of its next bull run. A strong DXY is bearish for BTC, but not in the initial phase of the bull. In 2021, there was a significant BTC rally into the new DXY bull, and a similar development could occur again. An accompanying chart suggested a target for that “final top” at $146,000.

For the short term, however, Bitcoin faces another macro hurdle: a new fiscal policy era in Japan. After the reelection of Prime Minister Sanae Takaichi, Japanese stocks surged to record highs. Analysis now sees negative impacts for US investment vehicles and crypto from this shift toward aggressive fiscal stimulus and tolerance for currency depreciation.

The landslide victory of Takaichi has marked a notable change, and the ‘Takaichi Trade’ has lifted the Nikkei while reshaping global capital flows. Findings warn of slowing inflows into US equity exchange-traded funds (ETFs), thanks to a weaker yen increasing the attractiveness of Japanese bonds. Against this backdrop, Bitcoin faces short-term downside risk.

In risk-off phases, BTC tends to correlate with U.S. equities, allowing equity-led de-risking to spill into crypto markets. This pressure does not reflect deterioration in Bitcoin’s on-chain fundamentals but rather cross-asset risk management. Crypto markets remain highly sensitive to Japan-related news, with some theories attributing the yen carry trade to last week’s BTC price crash.

Analyzing the yen situation ahead of the election, a senior research fellow at Brookings described its weakness as a “political liability.” With the election out of the way, the optics of yen depreciation may not matter as much, potentially setting the stage for the next round of yen weakening.

Bitcoin miners are also adjusting to current market realities after Bitcoin’s 15-month lows. However, research warns that a sell-off risk remains. Miner inflows to exchanges reached their highest levels since 2024 in recent days, with total deposits of 24,000 BTC noted on February 5 alone. Describing that tally as “exceptional,” a contributor from CryptoQuant noted that the market is undergoing a redistribution phase.

This rise in miner activity occurs within a market characterized by clear volatility and reduced risk appetite among segments of traders, potentially adding short-term selling pressure. However, these inflows do not necessarily indicate the start of a prolonged downtrend but may represent a natural redistribution phase within the market cycle.

The classic Hash Ribbons indicator, which measures periods of miner stress, continues to react to Bitcoin’s flash crash. The indicator’s two moving averages of hash rate show no signs of forming a classic bullish cross, firmly invalidating its latest “buy” signal from early January. As Bitcoin navigates these turbulent waters, traders are advised to stay informed and ready to adapt to changing market conditions.