Bitcoin (BTC), the largest cryptocurrency by market capitalization, fell below a crucial support level at $27,285 today. As a result, the coin, like many other cryptocurrencies, turns red.
Michaël van de Poppe, a well-known Dutch crypto analyst, sees weakness in Bitcoin’s current price. He predicts that the price could fall to around $26,700 in the coming days. He also points to a critical support level around $25,100. If this level is broken, the price could fall even further. For short-term investors, Michaël recommends selling when the price reaches $28,867.
Macroeconomic uncertainty
The recent short-term correction takes place against the backdrop of challenging macroeconomic situations in America. Currently, the country is struggling with complex problems such as inflation, debt and unemployment. According to the US Bureau of Labor Statistics, inflation has seen the biggest jump in 40 years, mainly due to rising costs for food, energy and housing.
In September 2023, the US national debt passed the $28 trillion mark. A recent report from the Congressional Budget Office (CBO) shows that the 2023 budget deficit is likely to be 13% higher than previously projected, at above $1.7 trillion. From 2023 onwards, this deficit is expected to fluctuate between US$1.6 and US$1.8 trillion per year, with an expected peak of US$2.9 trillion in 2033.
Bitcoin as a hedge against the economy
The current economic challenges in the US, while worrying, could have positive effects for Bitcoin in the long term. Given the rising debt and the possible low interest rates, alternatives such as Bitcoin appear increasingly attractive to investors thanks to the limited supply.
Well-known billionaire and investor Paul Tudor Jones predicts an upcoming recession and advises investors to focus their attention on both Bitcoin and gold. During a recent conversation with CNBC, Jones pointed out the risks of the current market and predicted a decline in stocks. In addition, he predicts an inflow of no less than 40 billion dollars into gold due to changing market positions.
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