Economista Sincero
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Why are Bitcoin and cryptocurrencies falling?
Technical analysis (without chart charlatanism or presidential tweets)
Today, the $BTC had a strong drop, followed by Altcoins. This is nothing more than a risk aversion movement (see Nasdaq chart - yes, Bitcoin is considered a risky asset linked to technology and follows the Nasdaq)
But why is the Nasdaq falling?
The market is buying/selling the recession thesis. Yes, this has come back onto the radar (see the GDPnow chart from the Atlanta Fed).
What does this chart say?
A forecast of a contraction in the American GDP of -2.6% (levels close to Covid).
Why is the GDP contracting?
- Anticipation of imports by American entrepreneurs fearing Trump's tariffs (import = money leaving the country)
- Decrease in household demand (service demand represents 70% of GDP)
Remember that the economy revolves around narratives. And this is the current narrative (it can change in a week).
This is the only reason for BTC's drop; it is not the nonsense of the chart hitting level x or the president's Twitter. This is short-term noise. Geopolitics can also be a short/medium-term movement (because it is made of narratives, and the market makes mistakes). Long term is just the fundamentals of the asset.
I know this whole talk is boring, and you wanted to read a prediction of the future. But this is the only truth you will read here. Any other prophet of "I warned you," is a charlatan
Technical analysis (without chart charlatanism or presidential tweets)
Today, the $BTC had a strong drop, followed by Altcoins. This is nothing more than a risk aversion movement (see Nasdaq chart - yes, Bitcoin is considered a risky asset linked to technology and follows the Nasdaq)
But why is the Nasdaq falling?
The market is buying/selling the recession thesis. Yes, this has come back onto the radar (see the GDPnow chart from the Atlanta Fed).
What does this chart say?
A forecast of a contraction in the American GDP of -2.6% (levels close to Covid).
Why is the GDP contracting?
- Anticipation of imports by American entrepreneurs fearing Trump's tariffs (import = money leaving the country)
- Decrease in household demand (service demand represents 70% of GDP)
Remember that the economy revolves around narratives. And this is the current narrative (it can change in a week).
This is the only reason for BTC's drop; it is not the nonsense of the chart hitting level x or the president's Twitter. This is short-term noise. Geopolitics can also be a short/medium-term movement (because it is made of narratives, and the market makes mistakes). Long term is just the fundamentals of the asset.
I know this whole talk is boring, and you wanted to read a prediction of the future. But this is the only truth you will read here. Any other prophet of "I warned you," is a charlatan
Disclaimer: Includes third-party opinions. No financial advice. May include sponsored content. See T&Cs.
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