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The 2024 US presidential election is decided. Donald Trump will get a second term, defeating Kamala Harris. During election night, the price of Bitcoin rose to a new high of $75,407 on Binance.
The excitement is driven by Trump’s big election promises. He wants to establish Bitcoin as a mass of national strategies, the Chairman of the Securities and Exchange Commission (SEC) Gary Gensler and generally implement a crypto-friendly policy. Although Harris’ victory would mean a short-term reversal of Bitcoin according to many experts, the forecasts of the majority of experts are very grateful for Trump’s victory.
However, renowned economist Henrik Zeberg offers a cautionary opinion. Zeberg warns that Trump’s proposed economic policies could cause a recession in the US, leading to a “beaten up” situation for Bitcoin and the broader crypto market. Central to his discussion is Trump’s plan to replace certain taxes with rates to encourage domestic economic growth.
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Drawing parallels with historical events, Zeberg suggests that Trump’s tax strategy may resemble the economic missteps of the 1920s and 1930s. In the post on X, he shared a link to the Wikipedia page for the Smoot-Hawley Tariff Act of 1930. He said: “Now everything is planned so that history repeats itself.” US Tariffs are used in recession-reinforcing recessions and the biggest bubble ever. “
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The Smoot-Hawley Tariff Act is widely regarded as the catalyst that deepened the Great Depression. By sharply raising US tariffs on imported goods, this action triggered retaliatory tariffs from other nations, leading to a sharp decline in international trade. This cycle of protectionism fueled a global recession, leading to rising unemployment and prolonged hardship around the world.
Amidst these economic concerns, Zeberg predicted a significant, but possibly temporary, rise in Bitcoin’s value. “Making it Simple! BTC is headed for 115-123K,” he asserted on X a few days ago. His analysis is based on Fibonacci expansion 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 key level to watch for is the Fibonacci retracement of 1.618, calculated at $114,916.16. He suggests that this level “may be very high,” indicating that Bitcoin could reach this price point before experiencing a significant reversal.
The analysis also notes some key Fibonacci levels that may act as resistance points during Bitcoin’s upswing. The 0.382 level at $77,437.88 shows the first significant resistance following the breakout from the previous all-time high.
The 0.618 level at $85,205.47 could act as minor resistance as the price moves higher. Additionally, the 1.0 level at $107,435.71 represents an important psychological and technical threshold, while the 1.27 level at $123,148.19 indicates a potential move beyond the primary target area.
The annotation on Zeberg’s chart raises the question, “58% in less than 3 months and up?” This suggests that you expect rapid price increases within a very short period of time, in line with historical patterns.
At press time, BTC traded at $73,742.
The featured image was created with DALL.E, a chart from TradingView.com
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