By CCN.com: Bitcoin price is unlikely to hit the December 2017 highs unless the U.S.-China trade war escalates to new levels, an analyst has told Kitco News.

According to DailyFX’s senior currency strategist Christopher Vecchio, bitcoin has lately been inversely correlated with the Chinese yuan. Being an effective method of moving value around the world, its price appreciated as the yuan weakened:

In an environment where the global financial system looks like it is potentially at risk because of the world’s two largest economies going at odds, people may be looking for alternative avenues to find ways to circumvent the capital controls being put in place to move their money around without the Chinese or U.S. government taking stock of it.

Bitcoin history not likely to repeat itself in the near term

But per Vecchio, it is unlikely for bitcoin to return to the $20,000 record high. The only exception is if the relationship between the U.S. and China worsens, weakening the yuan even further. According to Vecchio this would mean the yuan falling to 7 or lower against the dollar:

Dollar-yuan going past seven would be a kind of ‘world on fire’ type of event. Chinese policy makers control their currency rates so moving it beyond seven would be seen as effectively an escalation of the trade war to a new realm altogether.

Currently, one dollar is exchanging for approximately 6.9042 yuan. In the past five years the USD/CNY exchange rate has not crossed the 6.95 mark leave alone the 7.00 level.

USD/CNY at 7 not a pretty sight

While Bitcoin bulls would definitely welcome a weaker yuan, such a development would have real economic costs for China, according to CNBC. For one it would aid the narrative that China has been engaging in currency manipulation further complicating the U.S.-China trade negotiations.

And while it would make Chinese exports cheaper and thus more attractive on the global stage, a weaker yuan could also cause investors to flee China leading to large capital outflows.

Additionally, Chinese firms that have U.S. dollar-denominated debt would find that their loans have become more expensive to service with a weaker yuan.

Bitcoin to the moon, just not in the near future

Vecchio’s forecast that there are slim chances of Bitcoin hitting record highs is similar to other predictions by bitcoin bull Mike Novogratz and blockchain pioneer Vinny Lingham. Both men don’t expect the December 2017 high to be touched in the near term.

Novogratz has predicted that the price of bitcoin will consolidate in the range ‘between $7,000 and $10,000’. However, for the long term Novogratz is still bullish on the cryptocurrency. Lingham on the other hand also expects bitcoin to consolidate around the $10,000 level. He made the prediction late last month.

Currently, bitcoin is trading at below $7,700 having fallen from the day’s high of nearly $7,900.