Bitcoin: USD/BTC (BTC=X) Could Be the Only Solution for the Coming Global Recession
While the stock market continues posting all-time highs, economists are suggesting that the global economy is nearing a recession. A host of indicators point to global financial failure, and governments appear powerless to stop it. Could Bitcoin step in?
The most striking issues include the exploding debt ratios around the world and the ‘deglobalization’ of the world economy. Both of these massive issues point to a forthcoming recession, and tools to solve them are few and far between.
Debt and Disconnection
Global debt has reached epidemic proportions. Currently, governments around the world owe a staggering $244 trillion—the highest level ever. Not since WWI has debt come near this current level.
The debt has exploded largely due to central banks trying to stave off recession with monetary policy. Lowering interest rates to increase liquidity, and policies such as quantitative easing, have shifted debts into government ledgers. And the worst is yet to come, should a recession kick off in 2020.
Further, the world economy has begun the process of ‘deglobalization.’ Take, for example, Britain’s departure from the European Union, and trade wars between the US and China. Both reveal an underlying disconnection growing between world economies.
Whatever one may think of globalization, it has led to the previously soaring economy. Even with the complexities of the coronavirus, the global economy has been able to maintain trade and activity. A political reversal of this stability could spell disaster.
Central banks around the world have effectively spent all their ammunition to protect against recession. The general belief has been that reducing interest rates and injecting liquidity through borrowing would protect the economy.
However, interest rates are already at record levels. In Europe, several central banks have reduced rates below zero—a first for the global economy. And US rates are already at historic lows, in spite of a few increases last year.
Further, the injection of funds through debt has already been tried without success. The current debt ratios are so high because of this very issue, leaving central banks with no bullets left to fire.
Bitcoin to the Rescue?
In this chaos, Bitcoin offers a potential solution. Because the digital currency can function both as a ‘safe-haven’ asset, and as a payment platform, it provides both liquidity and stability.
As a payment platform, Bitcoin can be used to pay for transactions by any entity. This provides global liquidity, reversing the deglobalization trend.
As a safe-haven asset, Bitcoin offers a value storage tool that is not affected by governmental fiscal policies. No amount of central bank debt can cause Bitcoin to inflate its numbers. In this way, Bitcoin provides global fiscal stability.
Taken together, Bitcoin may be the last hope for governments seeking to stave off recession. By using the digital currency as another ‘gold standard,’ central banks may be able to turn the bus before it crashes.
Overall, the bias in prices is: Upwards.
Note: this chart shows extraordinary price action to the upside.
The projected upper bound is: 10,519.44.
The projected lower bound is: 9,111.11.
The projected closing price is: 9,815.28.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 2 white candles and 8 black candles for a net of 6 black candles. During the past 50 bars, there have been 29 white candles and 21 black candles for a net of 8 white candles.
Three black candles occurred in the last three days. Although these candles were not big enough to create three black crows, the steady downward pattern is bearish.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 52.9074. This is not an overbought or oversold reading. The last signal was a sell 13 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 53.34. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 11 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -33. This is not a topping or bottoming area. The last signal was a buy 3 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 9 period(s) ago.
Rex Takasugi – TD Profile
FOREX BTC= closed down -110.800 at 9,768.500. Volume was 4% below average (neutral) and Bollinger Bands were 32% narrower than normal.
Open High Low Close Volume___
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 9,766.47 9,149.70 8,805.18
Volatility: 53 49 56
Volume: 285,289 175,659 106,209
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
FOREX BTC= is currently 10.9% above its 200-period moving average and is in an downward trend. Volatility is high as compared to the average volatility over the last 10 periods. Our volume indicators reflect volume flowing into and out of BTC= at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on BTC= and have had this outlook for the last 3 periods.