Joe Biden’s financial stimulus package is expected to leverage the price of Bitcoin.
Bitcoin has extended its recovery trend as traders observe Joe Biden’s stimulus plan scheduled for late Thursday, a generous spending package would put pressure on the US dollar and increase demand for alternative safe haven assets.
The proposal by the elected president of the United States is expected to increase the federal deficit by about $ 2 trillion.
Government aid must go to state and local governments and a direct check payment of a maximum of US $ 2,000 for American families. Tom Block, Washington policy analyst at Fundstrat Global Advisors, said to CNBC that Thursday’s project could also include an extension of the eviction moratorium and “hundreds of billions” in government aid.
Friday’s labor market data, which showed that employers cut about 140,000 jobs in December, increased the need for greater government spending. Bulls see this as a signal to a weaker US dollar. Meanwhile, Bitcoin speculators are watching all macroeconomic development as a catalyst to take cryptocurrency to a new record.
“Bernie Sanders takes over the budget with the worst total deficit in 40 years”, said macro analyst Dan Tapiero on the newly appointed chairman of the Senate Budget Committee. “Interest rates cannot rise with an enormous debt burden. [O] The dollar’s bear market should continue or stocks will suffer. This scenario is perfect for gold and bitcoin. “
The reference cryptocurrency responded well to the stimulus narrative. Its token fee rose to $ 38,800 at the start of the London session, about 29% from its $ 31,000 low. However, Bitcoin continues to trade below its $ 41,986 record.
A renowned analyst said Bitcoin at $ 39,500 provides an ideal basis for continuing its bullish run.
“Recover $ 39.5k below and then we can hit new highs,” he said.
Meanwhile, another analyst has drawn two trend lines slanted around Bitcoin’s recent bearish correction and retreat movement, making it look like a bullish Pennan structure. This also suggested a bullish continuation – as much as the size of the previous bullish move, which easily puts Bitcoin en route to more than $ 42,000.
– MMCrypto (@MMCrypto) January 14, 2021
The prospects for Biden’s stimulus account also coincided with an increase in stablecoin deposits across all exchanges. Data analytics firm CryptoQuant noted that secondary capital has returned to trading platforms, pointing to a potential increase in cryptocurrency purchases.
Stablecoins, like Tether, act as defaults tokens in dollars due to their 1: 1 link to the dollar. Tether supply increased from $ 20 billion to $ 24 billion in more than a month, pointing to greater demand.