The global economy is currently focused on possible US default as a standoff over raising borrowing limits prevails.
In the event of such a historic default, market analysts foresee a potential direct impact on Bitcoin (BTC) the value considering the digital currency has established a level of correlation with the traditional financial sector.
Along these lines, Geoff Kendrick, Head of FX Research at Standard Chartered, estimates that Bitcoin can skyrocket around $20,000 to around $49,000 from current value or 68% growth if the cap of the debt is not raised by the estimate. July deadline and a fault occurs, Business Intern reported April 29.
Kendrick said Bitcoin has a reputation for performing well in times of stress and is often seen as a safe haven due to its decentralized nature.
However, the analyst expects some volatility, noting that Bitcoin may not rally in a straight line while projecting a decline of around $5,000 before rebounding again.
At the same time, he pointed out that if other cryptocurrencies like Ethereum (ETH) can negotiate more like actions and fall into default, Bitcoin’s behavior as a safe haven makes it an optimal trade.
“So in fact the optimal trade would probably be long Bitcoin, short Ethereum. That kind of mix would probably be a good expression of that,” Kendrick said.
Despite the deadlock among lawmakers over raising the debt ceiling, Kendrick said it was a “low probability, high impact event.”
Bitcoin capitalizes on stressful times
Indeed, if Bitcoin manages to rally in a default, it would be the second time this year that the crypto has taken advantage of the fallout from the traditional financial sector to rally. Notably, Bitcoin retested the $30,000 level after the banking sector The crisis acted as a catalyst.
In general, Kendrick expressed his bullish towards bitcoin, predict it could spike to $100,000 by the end of 2024 due to a variety of factors, including banking turmoil, the Bitcoin halving, and the expected end of Fed rate hikes.
“Although sources of uncertainty remain, we believe the path towards the USD 100,000 level is becoming clearer,” he said.
bitcoin price analysis
Bitcoin is currently trying to recover the $30,000 position as the asset faces increased volatility. At press time, Bitcoin was trading at $29,254, representing weekly gains of around 7%.
Asset is one day technical analysis recovered from TradingView turned bullish. A summary of the gauges recommends the “buy” sentiment at 14 while moving averages are for a “strong buy” at 13. On the other hand, oscillators are “neutral” at 9.
Overall, Bitcoin’s recent price action expressed positive sentiment, but was not enough to take the next big step. resistance region. However, if BTC claims the crucial $30,000 price level, it could indicate an extended bullish rally in the near future.
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