Valentin Fournier, an economist at BRN, recently pointed out that the US economy is facing multiple pressures and may enter a more severe recession than expected, which may prompt the Federal Reserve to take interest rate cuts in response. In his research report disclosed to Decrypt, he predicted that despite the grim economic outlook, Bitcoin may buck the trend and break through historical highs.
Currently, the price of Bitcoin is around $58,000, and it has fallen slightly in the past day, even hitting a low of $57,000 in early Asian trading. Despite market volatility, Fournier remains positive about the future trend of Bitcoin.
He mentioned that although Bitcoin has recently pulled back during US trading hours, this has become the recent norm and is not enough to change its long-term upward trend. At the same time, he noted that the remarks of Federal Reserve Chairman Powell at the congressional hearing emphasized that the Fed needs to have higher confidence in the inflation rate falling to the 2% target before cutting interest rates, and the current data has not yet fully supported this confidence.
In addition, Fournier also analyzed other economic indicators, such as the continuous decline in the service industry purchasing managers' index (PMI) and the slight increase in the US unemployment rate, which all point to a deepening economic recession. He expects that these unfavorable factors may accelerate the Fed's pace of interest rate cuts and the introduction of government fiscal stimulus measures, injecting more liquidity into the market.
Despite the challenging economic environment, Fournier remains confident in Bitcoin. He believes that as the market gradually digests the selling pressure from the German government and others, the upcoming Consumer Price Index (CPI) data and potential short-selling pressure are released, Bitcoin is expected to hit the $60,000 mark again.
Overall, despite short-term market volatility and investor profit-taking, analysts are generally optimistic about the future of cryptocurrencies and expect them to perform significantly better than traditional stocks.
