The likely victory of Joe Biden will lead to a huge stimulus package for the embattled US economy
An economic stimulus package worth several trillion euros will further weaken the dollar, which should have a positive effect on other currencies.
The price of Bitcoin (BTC) reached $14,999 today, its highest level since January 2018
The Bitcoin (BTC) price today extended its impressive bull market to $14,999 for the first time since January 2018.
Fundamental analysis: Weak dollar helps Bitcoin
Investors are betting that the likely victory of Joe Biden will lead to a huge stimulus package for the embattled U.S. economy. This morning the Bank of England (BoE) increased its already huge QE plan by £150 billion ($196 billion).
Paul Krugman, a Nobel Prize winning economist, said the United States needs a massive stimulus package to help the economy survive.
“Many people will be unemployed, many companies will be stressed. We simply have to make their lives bearable,” he said.
“We still have 11 million jobs fewer than before the disaster, and all these people are without pay, state governments are in extreme financial distress, thousands of businesses – perhaps hundreds of thousands – are on the verge of collapse.
In theory, a billion-dollar stimulus plan will further weaken the dollar, which should support other currencies, including Bitcoin. The Dollar Index (DXY) is now on its way to record the largest single decline since March.
“We may not know what a post-election stimulus might look like, but investors continue to believe that the Federal Reserve will continue to print money at a pace that favors the finite supply of Bitcoin,” said John Kramer of GSR.
Technical analysis: A clean break is taking place
The price of Bitcoin (BTC) reached $14,999 today, marking the highest value printed since January 2018 and a correction of all-time highs. The price action is now trading comfortably above the next support – the old resistance – at $14,200.
Bitcoin daily chart (trade view)
Any retreat into the lower purple zone is probably seen as an opportunity to buy Bitcoin. This is because the world’s largest digital asset is now clearly trading in breakout territory. Unless a huge correction occurs soon, BTC buyers are likely to target the next resistance zone at $16,200 as their next stop.
A Joe Biden victory is likely to lead to a multi-billion dollar aid package that will be passed by the Senate to help the struggling economy and ultimately support other currencies against the weakening dollar.