Why Bitcoin price comeback is primed after the 47% crash, Kraken economist says

Bitcoin is set to rally as markets calm down, according to Thomas Perfumo, global economist at Kraken.

Options traders are now betting that price swings will fade as Bitcoin’s price stabilises between $65,000 and $70,000, Perfumo told DL News.

“Historically, we’ve seen a similar dynamic during Bitcoin’s August 2024 and March-April 2025 corrections,” he said. “In both cases the dislocation preceded recovery rallies as markets digested heavy selling and volatility normalised.”

The Kraken analyst joins the likes of US Treasury Secretary Scott Bessent and Maelstrom chief investment officer Arthur Hayes, who have also made bullish predictions, suggesting that the market rout might be coming to an end.

Those predictions may serve as a balm to traders burnt by Bitcoin’s price crashing 47% below its October peak of $126,000. In the same time, the overall cryptocurrency industry has lost over $2 trillion, or about half, in value.

Other recovery signals

Perfumo also cited onchain data to support his argument for a market recovery.

A measure called “coin days destroyed,” which tracks the movement of older, long-held Bitcoin, has dropped back to lower levels after spikes in 2024 and 2025, Perfumo said.

That suggests fewer long-term holders are selling, reducing supply pressure and giving the market room to stabilise.

Gabe Selby, head of research at CF Benchmarks, also says the market may have bottomed out.

“Bitcoin’s price action and volatility suggest an exhaustion event,” Selby told DL News.

“The magnitude of the volatility spike, combined with Bitcoin’s roughly [47%] drawdown, suggests market participants are pricing in catastrophic outcomes, conditions that historically signal a panic-driven flush-out, not the beginning of a prolonged decline.”

Macroeconomic factors

Perfumo and Selby aren’t the only ones arguing that Bitcoin’s price is set for a rebound.

In a string of highly publicised blog posts, Hayes has argued that the Federal Reserve is going to pump the price of Bitcoin by adding liquidity into the market. The US central bank printing more money is usually positive for Bitcoin’s price movement.

Similarly, Bessent said on February 12 that the passage of crypto-friendly legislation like the Clarity Act will shore up investors’ confidence and thus boost Bitcoin prices.

To be sure, not everyone shares the bullishness.

Mike McGlone, the Bloomberg Intelligence strategist known for his bearish calls, warned on February 16 that the cryptocurrency market “bubble is imploding.”

McGlone sees Bitcoin crashing another 85% to trade at $10,000.

Kevin Warsh, US President Donald Trump’s hawkish pick to lead the Federal Reserve, may also affect the investors’ sentiment.

That’s because Warsh’s nomination is a significant U-turn by Trump, who has long insisted on lower interest rates which pump up asset prices.

A hawkish Fed means fewer and slower rate cuts, meaning less money in the financial system to boost asset prices like Bitcoin.

Not everyone shares the view that Warsh will be hawkish, though.

Wolfgang Münchau, director of Eurointelligence, wrote a column to DL News earlier in February, arguing that Warsh may be more flexible on interest rates than what people think and that he, more than anything, has family ties to Team Trump.

“Trump chose Warsh over other candidates,” Münchau said. “They all promised him that they would cut interest rates. Trump is wily enough to know that these promises are worth nothing.”

Crypto market movers

• Bitcoin is down 2.0% over the past 24 hours, trading at $66,801.
• Ethereum is down 2.8% past 24 hours at $1,963.

What we’re reading

• OpenAI releases crypto security tool as Claude blamed for $2.7m Moonwell bug — DL News
• Bitcoin price will hit a new record as AI destroys jobs, Arthur Hayes says — DL News
• Mysterious $436 Million IBIT Buyer Raises Eyebrows, Says ProCap CIO — Unchained
• BTC hasn’t done this since 2018 — Milk Road
• ETHZilla stock plummets as Peter Thiel exits Ethereum treasury bet, filings show — DL News

Lance Datskoluo is DL News’ Europe-based markets correspondent. Got a tip? Email him at [email protected].