Author: Bitkoala Finance
As the picture of Trump being shot in the ear spread across social networks in an instant, the ripple effect it caused was just beginning to spread across the global financial market. In this article, Bitkoala Finance will provide a technical analysis of the trend of Bitcoin after Trump's attack.
Is the Asian Handicap’s influence obvious?
After the weekend's rise, Bitcoin has broken through the downward trend line since June, and has re-entered the 20-day moving average, while also breaking through the previous low in June. This triple breakthrough indicates that the short-term upward trend has been established. The resistance that needs to be overcome in the short term includes the consolidation range of $61,460 at the end of June. If it breaks through effectively, it is expected to return to around $64,000 and challenge the medium- and long-term 50- and 100-day moving averages.
This was most clearly reflected in the U.S. dollar basket index and Bitcoin before the full opening of Asian stock markets on Monday.
The logic behind the rise of the US dollar is that the price of US bonds has fallen due to Trump's advocacy of loose fiscal policies, which has kept bond yields rising, benefiting the US dollar and putting pressure on other currencies, especially the RMB, which may face an escalation of the trade war. On the other hand, Bitcoin has climbed more than 5% in the past two days, rising to more than $60,000, mainly benefiting from Trump's friendly stance on cryptocurrencies.
In addition, assets that may also benefit include safe-haven assets such as gold and silver. These assets tend to become safe havens for funds when the overall environment is turbulent and uncertain.
From the perspective of the stock market, Trump's tenure was a clear boost to the U.S. stock market (see the figure below), which may have benefited from his tax cuts to stimulate the economy and protectionism towards the U.S. economy. In contrast, the boost to Asian stock markets was not so obvious, and was not much different from Biden's performance during his tenure.
From the perspective of sectors, due to Trump’s past policies, the market generally believes that the financial sector, energy sector and medical sector may benefit, while the green energy sector may be under pressure.
After the Asian session on Monday, Bitcoin broke through $62,000 per coin, up about 2% on the day, and Ethereum broke through $3,300 per coin, up 1.72% on the day, both rising to their highest levels since early July. Trump's contemptuous response to the assassination attempt has stimulated speculation that the former president who supports cryptocurrency has a higher chance of winning re-election.
What impact will the attack on Trump have on the Bitcoin market?
The news of Trump's attack could have short-term and medium-term impacts on the Bitcoin market. Although the cryptocurrency market has a low correlation with traditional financial markets, major events and global uncertainty may still cause market volatility. Here are a few possible influencing factors:
1. Risk aversion in the market
Short-term volatility: Sudden events usually trigger risk aversion in the market. Investors may turn to assets that are considered safer, such as gold and Bitcoin, leading to a short-term rise in Bitcoin prices.
Increased uncertainty: If events trigger greater economic instability, investors may focus more on cryptocurrencies as safe-haven assets, which could further push up Bitcoin prices.
2. Market sentiment and speculation
Sentiment swings: Rapid changes in market sentiment can cause dramatic fluctuations in Bitcoin prices. Investor panic or optimism can cause prices to fluctuate dramatically in a short period of time.
Speculative behavior: Some investors may take advantage of market uncertainty to engage in short-term speculation, increasing market volatility.
3. Global macroeconomic factors
Monetary policy: If events lead to major global economies adopting loose monetary policy (such as rate cuts or quantitative easing), this could increase Bitcoin’s appeal as an inflation-protected asset.
Recession Expectations: If events lead to increased market expectations of a global recession, investors may seek to diversify their portfolios, which could include Bitcoin.
Summarize
A key question for global markets now is whether the so-called "Trump deal" will gain momentum, with the argument being that Trump's return to the White House will bring tax cuts, higher tariffs and less regulation.
Trump has also increasingly embraced the cryptocurrency industry in an effort to win over voters. Last week, organizers of a Bitcoin conference to be held in Nashville, Tennessee, on July 27 said he would speak at the event. Tony Sycamore, a market analyst at IG Australia Pty, wrote in a report that the attempted assassination increased the likelihood of Trump's re-election, and Bitcoin "gained momentum" as a result.
Bitcoin's supporters argue that it can serve as a store of value and a hedge against political unrest, but that claim is controversial given its inherent volatility.
The cryptocurrency industry is trying to support candidates perceived to favor digital assets, including making large donations to the Fairshake political action committee. The industry is becoming an influential player in the 2024 election in part to fight back against a regulatory crackdown led by the U.S. Securities and Exchange Commission (SEC).
Finally, it is worth mentioning that Geoffrey Kendrick, head of foreign exchange and digital asset research at Standard Chartered Bank, analyzed that since Trump is more friendly to Bitcoin regulation and mining than Biden, as Trump's chances of being elected are increasing, it is expected that Bitcoin will rise to $100,000 in the November election and is expected to reach $200,000 by the end of next year.
I hope so!
