Analyses

Crypto Enthusiasts: Gold and Bitcoin Are the Best Hedges in Case of a Debt Servicing Problem – BTC, ETH, LTC Price Analysis, 22 June, 2020

In a semiannual monetary policy report before the US Senate's banking committee, Chairman of the US Federal Reserve Jerome Powell warned the Congress that the US federal budget has been on an unsustainable path for many years as the national debt has surpassed $26 trillion. 

Some cryptocurrency enthusiasts stated that gold and Bitcoin are the best hedges in case of a debt servicing problem:

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Source: Twitter

Bitcoin is not a new type of money, according to a recently published post by financial experts from the Federal Reserve Bank of New York. Michael Lee, an economist in the Bank's Research and Statistics Group, and Antoine Martin, a senior vice president in the Bank's Research and Statistics Group, concluded that Bitcoin is "just another example of fiat money" without legal tender status. 

However, the experts outlined that the cryptocurrency has one main distinguishing feature: via Bitcoin people can electronically transfer money without a third party. Therefore, they compared the cryptocurrency to a new class of electronic exchange mechanism. 

The cryptocurrency market continues to consolidate. At the time of writing, according to Coin360.com, one Bitcoin costs €8,371.52 (+0.28%), one Ethereum – €208.27 (+1.48%), and one Litecoin – €38.95 (+0.74%):

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Source: Coin360.com (Daily crypto market performance)

Now let's have a look at the price charts of the major cryptocurrencies against the euro.

BTC/EUR

In the daily time frame (1D), BTC/EUR has been in consolidation since the beginning of May:

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However, the major trend is still bullish, because there is a sequence of ascending local lows:

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According to the Technical Analysis theory, once the consolidation ends, it is more likely the uptrend to resume than a downtrend to start.

ETH/EUR

In the 4-hour chart (4H), ETH/EUR is trying to renew the upward movement from the lower line of the «ascending channel»:

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If the price of Ethereum succeeds in renewing the trend, then ETH/EUR may reach the upper line of the «Falling Wedge» in the daily (1D) time frame or a level of approximately €240 per one digital coin:

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LTC/EUR

In the 1-day tame frame (1D), the price chart of Litecoin is hovering over the 30-day Moving Average (MA 30) and the 90-day Moving Average (MA 90) – a signal that LTC/EUR is struggling to find clear direction:

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We think that the price of Litecoin will keep the correlation with the price movement of Bitcoin at least until the end of the current week.

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The analysis is purely informational and does not constitute investment, financial, trading, or any other sort of advice and you should not treat any of Bitvalex's content as such. Bitvalex does not recommend that any cryptocurrency should be bought, sold, or held by you. You are solely responsible to conduct your own due diligence and consult an advisor before making any investment decisions.


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