Bitcoin is still stuck in a tight range as it trades around $20,000 to $21,000. The cryptocurrency was rejected at major resistance levels and could re-test its yearly lows close to $17,000.
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At the time of writing, BTC’s price trades at $20,600 with a 1.4% loss and a 7% profit in the last 24 hours and last week respectively.
BTC’s price trends to the downside on the 4-hour chart. Source: BTCUSD Tradingview
Bitcoin has been trending to the downside since late 2021 when the cryptocurrency reached an all-time high at $69,000. Since then, BTC’s price has lost over 60% of its value and could continue trending to the downside in the short term.
However, former CEO at crypto exchange BitMEX Arthur Hayes claims a “Doom Loop” has begun in the macroeconomic arena. Via Twitter, Hayes shared the Euro (EUR) daily chart compared to the U.S. dollar.
The European currency reached parity with its North American counterpart for the first time in 20 years. Similar to Bitcoin, the Euro has been trending to the downside since 2021 and could potentially extend its losses.
This dropped was triggered by the Ukraine-Russia conflict, and by the increase in inflation forcing central banks around the world to take action by reducing their balance sheets or increasing their interest rates. The European Central Bank (ECB) has been unable to take an effective measure.
Thus, contributing to the decline of its currency. This “Doom Loop” is part of Haye’s scenario where the Euro and the U.S. dollar depreciated in favor of Gold and Bitcoin.
This scenario began playing out when Russia was cut off from the international financial system. In the coming decade, countries and people will prefer to purchase these commodities as opposed to central bank-issued fiat currency. Hayes explained:
as gold succeeds so will Bitcoin (…). Why should any central bank “save” in any Western fiat currency, when their savings can be expropriated arbitrarily and unilaterally by the operators of the digital fiat monetary networks?
EUR trends to the downside and reached parity with the U.S. dollar for the first time since 2003. Source: Tradingview
This uptrend in the price of Gold and Bitcoin could eventually take the assets to $10,000 and $1 million, respectively. The “Doom Loop” Hayes described is mostly a “mental shift” in financial entities, a decline in the only thing backing fiat currency: trust.
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When there is no trust, institutions and global governments can only trade in a trustless system. Thus, why Hayes predicts such a massive increase in the price of Bitcoin. However, this process will take time and could materialize at some point in the next decade.
The #DoomLoop has begun. 1 USD = 1 EUR. Prepare yourselves for YCC and $BTC = $1 million. But please be patient, these things take time.