Has Bitcoin peaked, is its price going to halve or double? To answer this question, the first thing the analyst takes into account is what is the main factor of concern for the year 2025. “For us it is the economic policy that Donald Trump is going to carry out. We must take into account that their economic policy measures are going to impact the economy progressively,” says José Luis Cava.
What is going to be the first one that is going to impact? According to the expert, the tightening of immigration. “The strong growth experienced by the United States economy, without generating labor tensions or salary tensions, has been due to the large arrival of immigrants. “If you now tighten and reduce the flow of immigrant arrivals, if you want the economy to continue growing, you are going to cause wage tensions.”
According to the analyst, the markets have already left this behind, and the yield on the 10-year American bond has already risen. And this, he explains, is the reason why Bitcoin has fallen, the reason why the S&P 500 has fallen since the beginning of December, “and also the reason why we have seen that there has been a notable deterioration in the breadth of the market, because this increase in wage pressures will harm small and medium-sized companies the most, both due to the increase in wages and the slowdown in the pace of interest rate cuts.”
The new has begun with the new year. “Donald Trump now says that he is more favorable to immigrants coming. But, of course, he wants them to be prepared immigrants, with great training. But what matters here is the change. There has been a change with respect to electoral promises. Before he was radically against immigration and now he is changing. This should be incorporated into the price of the 10-year American bond yield.”
Cava indicates that if we take into account that the rise in the yield of the 10-year American bond is what has slowed the rise of the stock markets and has also favored the fall of Bitcoin, what does the graph of the yield of the notes tell us? two years? It surpassed the resistance of 4.5%, “at that moment the downward pressures in the stock markets and in Bitcoin were accentuated, but it has a very important resistance at 4.7%. If it exceeded 4.7 we would see sharp falls in the stock markets. But as long as it moves below 4.7, we are going to consider as the most likely scenario that this rise in interest rates has not caused special damage.”
Because? For this, the most important variable is taken into account, the financial conditions index. “This index tells us if access to capital markets by companies is very difficult, it is very hard, banks do not grant credit or cannot access bond issues.” It is currently below zero, which tells us that financial conditions are lax. “This is the reason why the stock markets have not crashed despite the rise in interest rates. “Financial conditions have not tightened.”
And finally it focuses on the average inflationary expectations for the next 5 years that the markets are discounting, and which are anchored around 2.3%. “In my opinion, what is happening is that both in Bitcoin and in the stock markets we are witnessing a mere correction within an upward trend. And therefore we are going to consider as the most likely scenario that after this correction the stock markets and Bitcoin will display a new upward trend.”
What does the Bitcoin chart tell us? “We have drawn a support zone around 90,596-92,100. As long as Bitcoin respects this zone, we are going to consider the most likely scenario that it is a mere correction, a mere stop within the bullish trend. Yes, it is true, the weakness may still continue, both in Bitcoin and in the stock markets during the first week of January. I, however, believe that after this weakness they should deploy a new upward leg. The key would be for Bitcoin to definitively overcome the resistance of the 100,000 area.”
