The 2024 US presidential election has concluded, with Donald Trump securing a second term after defeating Kamala Harris. As the election results rolled in, Bitcoin experienced an unprecedented surge, hitting a new all-time high of $75,407 on Binance.
The market’s exuberance stems from Trump’s ambitious election promises. He plans to incorporate Bitcoin into the national strategic stockpile, dismiss SEC Chairman Gary Gensler, and adopt policies favorable to cryptocurrency. Experts had predicted a short-term dip for Bitcoin if Harris had won, but Trump’s victory has sparked overwhelmingly optimistic forecasts from the majority of cryptocurrency analysts.
However, not all are convinced of unending prosperity. Renowned economist Henrik Zeberg offers a word of caution. He argues that Trump’s proposed economic policies could trigger a US recession, leading to a dramatic peak-and-fall scenario for Bitcoin and the wider crypto market. Zeberg’s concerns focus on Trump’s initiative to replace certain taxes with tariffs to boost domestic growth.
Echoing the economic pitfalls of the past, Zeberg draws a parallel to the 1920s and 1930s and the impact of protectionist tariffs. Sharing a link to the Wikipedia page for the Smoot-Hawley Tariff Act of 1930, Zeberg stated, “Now everything is lined up for history to repeat itself. US Tariffs implemented into a Recession—reinforcing the downturn and popping the Greatest Bubble ever.”
The Smoot-Hawley Tariff Act is historically credited with deepening the Great Depression by escalating US tariffs on imported goods, prompting retaliatory tariffs from other countries, severely contracting international trade, and exacerbating global economic decline.
Amidst these economic warnings, Zeberg forecasts a significant yet potentially fleeting rise in Bitcoin’s value. “Making it Simple! BTC target 115-123K,” he asserted recently. His predictions are based on Fibonacci extension levels, a technical analysis tool used to forecast future price movements grounded in historical trends.
Zeberg’s analysis highlights the 1.618 Fibonacci extension, calculated at $114,916.16, as the critical level to watch. He suggests that this mark is “very likely the top,” implying that Bitcoin could hit this level before reversing sharply.
The analysis also identifies other key Fibonacci levels that may function as resistance points during Bitcoin’s upward trajectory. The 0.382 level at $77,437.88 serves as a significant resistance following the breakout from the previous all-time high. The 0.618 level at $85,205.47 could offer minor resistance as prices climb, while the 1.0 level at $107,435.71 stands as a vital psychological and technical threshold. The 1.27 level at $123,148.19 suggests a potential overshoot beyond the primary target.
An annotation on Zeberg’s chart questions, “58% in less than 3 months into the top?” indicating he expects a rapid price increase in a short period, in line with historical price behavior.
As of the latest data, Bitcoin is trading at $73,742.
