Economist Predicts ‘Blow-Off Top’ For Bitcoin At $123,000 Post-Trump Win

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As a seasoned analyst with over two decades of experience in economic and financial markets, I have witnessed numerous bull and bear cycles unfold. The 2024 US presidential election results and its potential impact on Bitcoin have piqued my interest.

2024 U.S. Presidential Election Outcome: Donald Trump secures another term in office, outrunning Kamala Harris. As votes were being counted on election night, the value of Bitcoin reached an unprecedented peak of $75,407 on Binance.

As a researcher examining this situation, I find that the optimism stemming from my perspective is fueled by President Trump’s ambitious election pledges. His vision includes the creation of Bitcoin as a national strategic reserve, dismissal of Gary Gensler as Chairman of the Securities and Exchange Commission (SEC), and overall promotion of a pro-cryptocurrency stance.

On the contrary, economist Henrik Zeberg presents a cautious outlook. Zeberg predicts that if Donald Trump’s proposed economic policies are implemented, they could trigger a recession in the U.S., which might cause a peak and potential crash in Bitcoin and the broader cryptocurrency market. At the heart of his argument is Trump’s intention to swap certain taxes for tariffs to spur domestic economic expansion.

Is A Bitcoin Blow-Off Top Scenario Looming?

In a post on X, Zeberg compares Trump’s tariff policies to historical economic mistakes of the 1920s and 1930s. He emphasized this by sharing a link to the Wikipedia page for the Smoot-Hawley Tariff Act of 1930. His statement reads: “The conditions are ripe for history to repeat itself. US tariffs leading to a recession—amplifying the downturn and bursting what could be the biggest bubble yet.

The Smoot-Hawley Tariff Act is often seen as a key factor that intensified the Great Depression. By significantly raising U.S. taxes on imported goods, this act triggered similar tariffs from other countries, causing a significant reduction in global trade. This series of protectionist measures worsened economic conditions globally, leading to increased unemployment and prolonged difficulty worldwide.

As a researcher, I’ve recently examined the economic landscape and found that Bitcoin could experience a substantial, albeit temporary, increase in value according to Zeberg’s predictions. In simpler terms, he expects BTC to reach between 115K and 123K. His analysis is built upon Fibonacci extension levels, a technical tool that helps foretell future price fluctuations by analyzing historical price trends.

Based on Zeberg’s assessment, the key level to keep an eye on is approximately $114,916.16, which represents the 1.618 Fibonacci extension. He posits that this level might very well be the peak, implying that Bitcoin could potentially attain this price before undergoing a substantial price drop.

The report highlights additional important Fibonacci levels which could potentially act as barriers when Bitcoin rises. Notably, the 0.382 level around $77,437.88 stands out as a substantial initial barrier after breaking the previous record high.

At approximately $85,205.47, the 0.618 level might act as a minor barrier to further price increases. Meanwhile, the $107,435.71 mark is significant due to both psychological and technical factors, serving as a major hurdle. Lastly, if prices continue to rise, there’s a potential for an overshoot beyond the main objective area at around $123,148.19 (the 1.27 level).

The note on Zeberg’s graph queries, “Is 58% achieved in less than 3 months at the top?” This implies that Zeberg expects a significant price surge to occur quite quickly, aligning with past trends.

At press time, BTC traded at $73,742.

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2024-11-07 01:57