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The US presidential election has been scheduled for 2024. Donald Trump will get a second term, defeating Kamala Harris. At midnight on election night, Bitcoin’s price rose to a new all-time high of $75,407 on Binance.
This euphoria is driven by Trump’s big campaign promises. He wants to establish Bitcoin as a national strategic stock, fire the head of the Securities and Exchange Commission (SEC), Gary Gensler, and impose a crypto-friendly policy in general. While a Harris win would have meant a short-term setback for Bitcoin according to most experts, the majority of experts’ forecasts are very optimistic thanks to a Trump win.
However, renowned economist Henrik Zeberg offers a cautionary view. Zeberg warns that Trump’s proposed economic policies could precipitate a recession in the United States, leading to a “blast top” scenario for Bitcoin and the broader cryptocurrency market. Central to his argument is Trump’s plan to replace some taxes with tariffs to stimulate domestic economic growth.
Is a Bitcoin explosion scenario looming?
By drawing parallels with historical events, Zeberg suggests that Trump’s tariff strategy could reverse the economic mistakes of the 1920s and 1930s. In a post on X, he shared a link to the Wikipedia page for the Smoot-Hawley Tariff Act of 1930. male: “Now everything is set for history to repeat itself. US tariffs have triggered a recession, exacerbating deflation and bursting the biggest bubble ever.
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The Smoot-Hawley Tariff Act is widely viewed as the catalyst that deepened the Great Depression. By significantly increasing US tariffs on imported goods, this law led to retaliatory tariffs from other countries, resulting in a sharp contraction in international trade. This spiral of protectionist measures has exacerbated the global economic decline, leading to higher unemployment rates and prolonged hardship around the world.
Amid these economic concerns, Zeberg predicts a significant, but likely short-lived, rise in the price of Bitcoin. “Make it simple!” “BTC is targeting 115-123K,” he confirmed via X a few days ago. His analysis is based on Fibonacci extension levels – a technical analysis tool used to predict future price movements based on historical price patterns.
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According to Zeberg’s analysis, the critical level to watch is the 1.618 Fibonacci extension, which is calculated at $114,916.16. He notes that this level is “very likely to be the top,” suggesting that Bitcoin may reach this price point before seeing a major reversal.
The analysis also points to other key Fibonacci levels that may serve as resistance points during Bitcoin’s rise. The 0.382 level at $77,437.88 represents significant initial resistance after a breakout from the previous all-time high.
The 0.618 level at $85,205.47 could act as a minor resistance as the price rises. Additionally, the 1.0 level at $107,435.71 represents a crucial psychological and technical threshold, while the 1.27 level at $123,148.19 indicates a potential breakout beyond the primary target area.
A caption on Zeberg’s chart asks the question: “58% in less than 3 months to reach the top?” This indicates that a rapid price increase is expected over a relatively short time frame, consistent with historical patterns.
At press time, Bitcoin was trading at $73,742.
Featured image created with DALL.E, a chart from TradingView.com