Problems with the US debt limit will not affect Bitcoin.
May 4, 2023 2:24 pm
On the 4-hour timeframe, it is evident that Bitcoin has been in a flat pattern for several weeks. We previously discussed the sideways channel of $26,600–$30,600. However, there is no need even to depict this in an illustration, as the naked eye can see the sideways movement. Each rebound from the $29,750 level triggers a drop of 2–3 thousand dollars. The auxiliary level is $30,600. Overcoming both levels will signal traders about the possibility of new purchases of the first cryptocurrency.
Lately, a trend has emerged on well-known cryptocurrency analytical websites to discuss the US government debt limit issue. It is necessary to express our own opinion on this matter. Naturally, most experts believe that problems with the government debt, which currently amounts to $31.5 trillion, will lead to new growth in Bitcoin. The banking crisis in the US will also lead to the growth of the cryptocurrency market. Each new bankruptcy will mean that money is withdrawn from the banking system. And since they are being withdrawn from somewhere, they must appear somewhere. And in part, this will be the cryptocurrency market.
However, the issue with US government debt will not impact the Bitcoin exchange rate. Let’s start with the problem of reaching the “ceiling” of government debt in the US every year. After this, lengthy negotiations begin between Republicans and Democrats on how the decision to raise the limit will be approved. For example, Republicans now demand a reduction in spending of $4.5 trillion, which Democrats disagree with. However, a common language was found in all previous similar cases, and the corresponding decision was made. Thus, this time will be the same, as neither Republicans nor Democrats need a “technical default.”
It should also be noted that more than half of the US government’s debt belongs to the Federal Reserve. That is, the US government, as a state, owes about $16 trillion to its central bank. Moreover, the Federal Reserve can print as much money as needed and buy back government debt. The dollar remains the world’s reserve currency, so the printed money will spread worldwide, as before, without causing a strong spike in inflation within the country. Therefore, the problem of US government debt is not a problem.
In the 4-hour timeframe, the cryptocurrency continues to trade in a sideways channel. Overcoming the $29,750 level will again allow buying Bitcoin (but with confirmation in the form of overcoming $30,600). Rebounding from the $29,750 level can provoke correction spirals of 2-3 thousand dollars down each time. Whether or not to trade in a flat pattern is a personal choice for each trader.
The material has been provided by InstaForex Company – www.instaforex.com
On the 4-hour timeframe, it is evident that Bitcoin has been in a flat pattern for several weeks. We previously discussed the sideways channel of $26,600–$30,600. However, there is no need even to depict this in an illustration, as the naked eye can see the sideways movement. Each rebound from the $29,750 level triggers a drop of 2–3 thousand dollars. The auxiliary level is $30,600. Overcoming both levels will signal traders about the possibility of new purchases of the first cryptocurrency.
Lately, a trend has emerged on well-known cryptocurrency analytical websites to discuss the US government debt limit issue. It is necessary to express our own opinion on this matter. Naturally, most experts believe that problems with the government debt, which currently amounts to $31.5 trillion, will lead to new growth in Bitcoin. The banking crisis in the US will also lead to the growth of the cryptocurrency market. Each new bankruptcy will mean that money is withdrawn from the banking system. And since they are being withdrawn from somewhere, they must appear somewhere. And in part, this will be the cryptocurrency market.
However, the issue with US government debt will not impact the Bitcoin exchange rate. Let’s start with the problem of reaching the “ceiling” of government debt in the US every year. After this, lengthy negotiations begin between Republicans and Democrats on how the decision to raise the limit will be approved. For example, Republicans now demand a reduction in spending of $4.5 trillion, which Democrats disagree with. However, a common language was found in all previous similar cases, and the corresponding decision was made. Thus, this time will be the same, as neither Republicans nor Democrats need a “technical default.”
It should also be noted that more than half of the US government’s debt belongs to the Federal Reserve. That is, the US government, as a state, owes about $16 trillion to its central bank. Moreover, the Federal Reserve can print as much money as needed and buy back government debt. The dollar remains the world’s reserve currency, so the printed money will spread worldwide, as before, without causing a strong spike in inflation within the country. Therefore, the problem of US government debt is not a problem.
In the 4-hour timeframe, the cryptocurrency continues to trade in a sideways channel. Overcoming the $29,750 level will again allow buying Bitcoin (but with confirmation in the form of overcoming $30,600). Rebounding from the $29,750 level can provoke correction spirals of 2-3 thousand dollars down each time. Whether or not to trade in a flat pattern is a personal choice for each trader.
The material has been provided by InstaForex Company – www.instaforex.com
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