Connect with us

Bitcoin

Why a “Blue Wave” Biden Win Could Be the Best Scenario for Bitcoin

Published

on



In a new note to investors, Goldman Sachs projects “low odds” that the dollar will close the year on a high note, chiefly due to a potential “blue wave” win where Biden sweeps the vote. These poor conditions for the greenback, however, is a best-case scenario for Bitcoin, which could benefit enormously if Democrats take office.

How a Democratic Victory & Joe Biden Win Could Positively Impact Bitcoin

2020 is unarguably the most challenging year of modern times. Capping off what has been a year of fear, uncertainty, money printing, protest, and more, is the United States’ most pivotal election in years.

Biden is currently leading Trump in the polls, and markets could soon begin to price in the ever-increasing chances of a Democrat victory in the White House. Policy change due to Dems taking over may not bode well for stocks, but it could benefit Bitcoin for several key reasons.

RELATED READING | WHY THE UPCOMING US ELECTION IS BITCOIN’S BIGGEST RISK

In the past, the uncertainty leading into the campaign season and the election has kept Bitcoin’s price from retesting all-time highs. It wasn’t until the month the current President Donal Trump took office that sent Bitcoin soaring through $1,000 to a peak of $20,000 a year later.

BTCUSD Monthly New All-Time High After Presidential Election Conclusion Example | Source: TradingView

But a Biden may be even more beneficial to the future of Bitcoin than the boost the crypto asset saw the last time the dust settled on the US election. For one, democratic policy is more fostering toward technological innovation, whereas the Trump administration has recently taken a hard stance against cryptocurrencies.

However, the most critical reason has a lot more to do with green, and we don’t mean their environmental policies.

Goldman Sachs: “Low Odds” The Dollar Rebounds In 2020, Risk Of Return To 2018 Low

In a recent note to clients, Goldman Sachs tells a woeful story of a weakening dollar that has “low odds” of any positive outcome by year’s end. Co-Head of Global FX, Rates and EM Strategy Zach Pandl recommended taking short positions against the dollar across two different baskets of competing currencies.

The dollar is expected to decline even further if Biden succeeds, which is now projected at a 60% chance based on the latest poll information. “In our view, a ‘blue wave’ U.S. election and favorable news on the vaccine timeline could return the trade-weighted Dollar and DXY index to their 2018 lows,” Pandl concluded.

dollar dxy bitcoin biden blue wave

DXY Correlation Over BTCUSD Monthly Price Chart | Source: TradingView

The 2018 low Pandl points to was also just after Bitcoin’s 2017 peak, and during peak altcoin season when speculation sent the prices of other top crypto assets like Ethereum and XRP to all-time highs.

RELATED READING | DOLLAR INDEX FRACTAL SUGGESTS AN INCREDIBLE ALTCOIN SEASON IS ON THE HORIZON

If Biden wins, and as Pandl suggests, a vaccine is on track for sooner than later, the safe haven of the dollar won’t be as attractive, and it could lead to enormous growth in Bitcoin and cryptocurrencies due to the dollar’s weakness.

Featured image from Deposit Photos, Chats from TradingView



Source link

Bitcoin

Bitcoin price bounces to $33K but analysts say ‘it’s too early’ to call a bottom

Published

on

By


Cryptocurrency investors found little reprieve on June 22 as the price of Bitcoin (BTC) fell below $30,000 for the first time since January, sparking panic among less experienced market participants who have yet to experience a full market cycle. 

While Bitcoin has been under increasing pressure from multiple sources since early May, the most recent bout of selling has been largely attributed to capitulation by China-based miners who have been forced to abruptly shut down their operations.

Data from Cointelegraph Markets Pro and TradingView shows that after dropping to $28,800, Bitcoin price bounced back above the $30,000 level and currently trades for $32,600.

BTC/USDT 4-hour chart. Source: TradingView

The strong bounce came after comments from Brian Nelson, the current nominee for Under Secretary of the Department of the Treasury’s division on terrorism and financial crimes. Nelson said he was going to make the implementation of new regulations around cryptocurrency a priority if he is confirmed.

Miner crackdown in China sparks market turmoil

The pressures put on Bitcoin and the overall cryptocurrency market was highlighted by Élie Le Rest, partner at digital asset management firm ExoAlpha. Le Rest told Cointelegraph that “Chinese market participants have been massively selling during the past month.”

Le Rest also pointed to the “Grayscale unlocking schedule leading to more selling pressure,” resulting in some panic selling by the less experienced traders in the market.

Le Rest said,

“With newcomers in the crypto market seeing their profit and capital getting wipe out by selling waves, newcomers are taking their loss as they can’t stomach this much negative volatility anymore.”

Due to these pressures, Le Rest believes that the market could range in the “lower tranches of $25,000 to $35,000” in July, with the low volume usually seen in August having the potential to “accelerate this downside trend or build the upside trend.”

The upside case for today’s move was provided by David Lifchitz, managing partner and chief investment officer of ExoAlpha, who stated that the activity seen in the market on June 22 “seems to have drawn the line in the sand for BTC at $29,000 and Ether (ETH) at $1,700, given the swift bounce.”

Related: Bad call? Bitfinex bears closed a block of Bitcoin shorts before the drop below $32K

That being said, Lifchitz warns against throwing caution to the wind as the volatile nature of the crypto market makes picking a bottom notoriously challenging.

Lifchitz said:

“However, it’s too early to tell if this is “the” bottom or just a temporary floor before more downside. The lack of any upside catalyst (besides some contrarian oversold metrics) remains the biggest hurdle for cryptos to bounce back… Paging Mr.Musk, paging Mr.Musk.”

Altcoins see double-digit losses

The altcoin market followed Bitcoin’s lead on June 22 with a majority of tokens seeing double-digit losses as traders ran for the safety of stablecoins.

Daily cryptocurrency market performance. Source: Coin360

The price of Ether managed to rebound along with the price of BTC, helping erase a 15% correction and send the price back above $1,900.

Two tokens that managed to rise above the market turmoil and see positive gains for the day were Livepeer (LPT), which posted a 15% gain and Celo (CELO), which saw its price increase by 9%.

The overall cryptocurrency market cap now stands at $1.303 trillion and Bitcoin’s dominance rate is 47.1%.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.