BTC / USD is up 160% since January and 295% from March low. We will even be at +334% once the $ 20,000 has been reached. For comparison, the CAC40 is currently losing 10% over the year and the French 10-year rate is yielding…. -0.30%.
Bitcoin (BTC) sports a powerful inverse correlation with its great rival for the throne of the first international reserve currency. And while Iran has just added Bitcoin to its Central Bank reserves, the dollar king is being vilified by major international banks such as Deutsche Bank, Citigroup or Goldman Sachs who expect the greenback to continue to rise. depreciate in 2021.
Goldman Sachs expects the US dollar exchange rate (trade-weighted) to decline by 6% by December 2021.
The “weighted” exchange rate more accurately reflects the overall change in the value of the dollar because it takes into account each country’s share of trade. The index is weighted as follows: Euro zone (16%), China (21%), Canada (12%), Mexico (11%), Japan (7%), United Kingdom (3%), etc. So it’s a bit the same thing on the Dollar Index, but finer (EUR / USD weighs 57% in the basket of the Dollar Index).
The New York-based bank even sees a 15% drop by 2024 from the 2020 high (102). Zach Pandal, Goldman’s FX analyst, asserts that the dollar is currently about 10% overvalued and that the Fed’s monetary policy is pushing real interest rates into negative territory.
Citigroup is even more aggressive and predicts a 20% drop in the dollar for 2021 in the event of mass vaccine distribution. The reasoning being that the arrival of the vaccine will rekindle risk appetite and reduce demand for the two great safe havens of the dollar and gold since the start of the pandemic. Which is in line with Citigroup’s forecast of $ 300,000 for Bitcoin …
And given that Bitcoin continues to gain ground since Pfizer’s announcement, that means its inverse correlation with the dollar is stronger than its positive correlation with gold. Good to know.
On the other hand, even though gold fell on the announcement of the vaccine, it should be remembered that the consensus still expects the barbaric relic to rise sharply in the coming months. Goldman Sachs, for example, anticipates a rise of 22% next year, to $ 2,300.
According to GS analysts, “Gold will likely follow the same path as after the collapse of Lehman Brothers in 2008 with a sharp rise in the recovery phase of the business cycle due to inflation expectations. […]. “. Indeed, let us not forget that the FED is now calling for a inflation above 2%…
Twitter / Google
It should be noted that unlike December 2017, the Bitcoin rally is developing this time around without boiling searches for the word “Bitcoin” on Google.
The same goes for Twitter where we observe between 30,000 and 60,000 tweets a day about Bitcoin while we were around 120,000 tweets in 2017.
This lack of online excitement suggests that this time around it is not individuals but seasoned investors who are trading their fiat for BTC. A number of billionaires and companies have recently announced that they have added Bitcoin to their wallets. Square, Wilshare Phoenix or MicroStrategy.
All of this suggests that we should easily set a new all-time high over the next few weeks if individuals wake up. Bloomberg financial analyst Mike McGLone thinks BTC / USD will hit $ 47,000 quickly if it rises again. The capitalization of the Bitcoin network will then surpass $ 1 trillion …
ECB / FED
Christine Lagarde will speak several times this week. After an appearance on Monday at the World Economic Forum (Pioneers of Change Summit), the ECB president will also answer questions from Bloomberg on Wednesday as well as questions from MEPs on Friday.
Also closely follow the statements of the governors of the FED. Many will speak out over the next few days. Any statement along the lines ofan increase in QE will be bullish for Bitcoin.
The fact that central banks print trillions remains the biggest support for BTC. The ECB’s balance sheet now exceeds € 6.830 billion and is now equivalent to 68% of euro area GDP. Against 34% for the FED, 36% for the BoE (UK) and 131% for the BoJ (Japan).
From a graphical point of view, a boulevard presents itself for the new all-time high, the $ 25,000 in sight. Keep an eye out for Futures however. It would not be surprising if the banking mafia tries to block the road to the $ 20,000. We also see several cassandres which gather together …
- BTC / USD weekly chart (one candle = one week)