BITCOIN: IS A RECESSION POSITIVE FOR BITCOIN?
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Technically speaking Bitcoin is currently facing a very tough time. We do see that Bitcoin appears to be forming some kind of a basing pattern near the $9600 area. So, is the picture bullish or bearish? Also, what could happen to bitcoin if a recession occurs in the near-term? Today, we’re going to dive into this. Also, if you enjoy the content, don’t forget to leave a like and subscribe.
In my view, the recent bearishness is probably due to emotions. After all, those who went “All-in” at $13.600, perhaps feel a bit scared by now. A 40% decline is probably causing pain for some Hodlers. Washouts like that do occur, and often precede massive rallies to new all-time highs. I’m not saying that this is the way it’ll play out, but I have seen these patterns play out like that sometimes before. But in any case, I think that even if we breakdown to $8000, then we would continue to our next leg higher. So please be aware that a potential break down to 8000 is entirely possible.
However, at the same time, there's a second dynamic that happens whenever the Fed decides to cut rates down to zero. After all, this typically signals the beginning of a recession. And we really don't know what could happen to the price of Bitcoin during a recession. However, Bitcoin could possibly behave somewhat like gold did during the financial crisis. For context, in 2007, the price of Gold was at $837. In 2008, during the height of the recession, Gold increased slightly to $870. Finally, when the recession ended in 2009, the price of gold reached $1100. So this is roughly a 30% increase in the price of Gold during the Great Recession of 2007 to 2009. Generally speaking, the price of Bitcoin has 10 times the volatility of gold. So if a recession comes and it's similar to the last one, we should see a 300% increase in the price of Bitcoin, which would translate to a $40,000 price target.
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