Bitcoin crossed the $ 118,000 mark this Friday morning, only one day after having set a historic record above $ 112,000.
In short
- More than $ 500 million in liquidated lower base positions.
- Do the budget deficit and the possible resignation of Jérôme Powell weigh in the balance?
- Are Elon Musk and Jeff Bezos for purchase?
Massive liquidations on bitcoin
Bitcoin experiences a spectacular flight, from 110,000 to 118,000 dollars in less than 24 hours. It has been several years since we had attended such liquidation of lowering positions.
The stop-loss of around 237,000 traders have triggered. The biggest loss was a short position of $ 88.5 million on HTX. It is the whole equivalent of more than half a billion dollars in lowering positions which have just evaporated.
This breakout is potentially linked to the intensification of the denigration campaign against the president of the Federal Reserve Jerome Powell. Donald Trump nicknamed him “M. too late” because of his refusal to lower interest rates despite the drop in inflation.
Pressure has risen a notch since the American president sent him a handwritten letter to act on the rates. This week, Mr. Powell was accused of having lied to the congress On the details of a planned renovation of the Fed headquarters for approximately 2.5 billion dollars.
“They try by all means to encourage him to resign”, said Alan Blinder, former vice-president of the Fed. “I don't think he will do it and I don't think he should do it”he added.
It should also be noted that the Supreme Court clearly indicated in a judgment of May that it would not support the dismissal of Mr. Powell by the president:
The federal reserve is an almost private entity to the unique structure which is part of the historical and distinct tradition of the first and the second central bank in the United States.
Supreme United States Court
What if Jerome Powell resigns?
There would be a good chance that the Fed will open the valves of the credit by lowering the rates. However, Bitcoin is a coverage against monetary devaluation caused by budgetary deficits. That of the United States obviously weighs very heavy in the balance, probably 30 % of global budgetary deficits.
The “One Big Beautiful Bill” recently passed by the US congress should add $ 5,500 billion to American debt. A debt that already reaches $ 36,600 billion, or 124 % of GDP. Enough to make government borrow rates get worse …
So that with interest on the debt reaching $ 1,000 billion per year (1/5 of tax revenues), there is a good chance that the Fed will end up bringing out its ticket board (QE).
Indeed, the American central bank transfers the government the interests it collects on the treasury bills it collects via the QE. In other words, the exponential effect of interests is neutralized. This is probably what Donald Trump is looking for by ousting Jérôme Powell.
Some people think that the rally is rather linked to Amazon. It has been rumored for some time that the multinational has not spread the possibility of making bitcoin an active treasury. Rumor has grown since Jeff Bezos sold $ 665 million. Why do it? Buy bitcoins?
Elon Musk also made several statements suggesting that he was going to buy bitcoins soon. Could it be at the baguette since yesterday?
Don't miss our article: Bitcoin: The Bitwise CEO aims for $ 1,000,000.
Maximize your Cointribne experience with our 'Read to Earn' program! For each article you read, earn points and access exclusive rewards. Sign up now and start accumulating advantages.
