Musk supports Trump, Trump's words support Bitcoin

On Friday, October 4, although Bitcoin held onto $61,000, it still had a short-term breakout. Billionaire Musk warned that the United States was heading for bankruptcy, with the country's debt increasing by $204 billion in one day. Meanwhile, after former U.S. President and Republican presidential candidate Trump said he would save Silk Road founder Ross Ulbricht if he won, the U.S. election victory rate in November flashed a "golden cross."

After revealing details of a secret meeting with Nayib Bukele, the pro-Bitcoin president of El Salvador, Musk once again warned that the United States is heading for bankruptcy because the country's debt increased significantly in a single day. EJ Antoni, an economist at the conservative Heritage Foundation, wrote that the federal debt exploded on the first day of the new fiscal year, reaching a new high of $35.669 trillion, and the situation is even worse. The Treasury Department also used $72 billion in cash balances, meaning the deficit exceeded $275 billion in just one day.

In September, Musk met with Bukele, who introduced Bitcoin as legal tender in El Salvador in 2021. Bukele predicted that the United States' days may be numbered. The U.S. will pay $870 billion in interest on its debt this year, according to an analysis by the Congressional Budget Office, after massive spending and money printing during the pandemic, runaway inflation forced the Federal Reserve to raise interest rates. The U.S. national debt has soared in recent years, breaking the $34 trillion mark in early 2024, largely due to the pandemic and lockdown stimulus measures.

CK Zheng, chief investment officer of crypto hedge fund ZX Squared Capital, said that since neither the Republicans nor the Democrats have properly addressed the growing debt and deficit issues in the United States in this election, this is very positive for Bitcoin, especially after the US election. Earlier this year, Bank of America analysts warned that the US debt burden could grow at a rate of $1 trillion every 100 days, which could push up Bitcoin prices and could reach $36 trillion by the end of 2024.

Last month, the Fed started a rate-cutting cycle, surprising the market with a 50 basis point cut, sparking expectations of a similar cut in November. Bitcoin prices fluctuated this week as tensions in the Middle East escalated between Israel and its neighbors, raising concerns that the regional conflict could escalate into a wider war, highlighting Bitcoin's role as a hedge against the dollar and debt. Jeff Kendrick, head of cryptocurrency research at Standard Chartered, wrote in an email that Bitcoin's price performance this week shows that it is not a safe haven against geopolitical concerns, but a hedge against traditional financial problems.

In a Truth Social post on Wednesday, Trump promised to "save Ulbricht," and the U.S. election victory rate in November flashed a "golden cross," with Trump surpassing Vice President and Democratic presidential candidate Harris for a time. As of press time, the two were tied at 49%.

Conclusion:

In terms of Bitcoin technical analysis, cryptocurrency analyst Mikybull Crypto gave a bullish outlook on Bitcoin prices, predicting that the cryptocurrency will experience a breakout after experiencing the fifth wave of impulsive gains before the end of October. His prediction is made against the backdrop of several external factors that could cause Bitcoin to fall below $60,000. He said that the breakout into the fifth wave of expansion should occur on "expected October 22nd," and that market participants are currently suffering from the inconvenience of the extended adjustment of the fourth wave. The accompanying chart he shared shows that when the fifth wave of expansion occurs, the price of Bitcoin may reach between $95,000 and $120,000, meaning that a new all-time high may be set this month. Cryptocurrency analyst Ali Martinez provided insights on how Bitcoin could fall to $57,000, saying that $60,365 is a key level, and if it falls below, the cryptocurrency may fall to $57,420, and if it stays above this level, a rebound to $63,300 is possible.

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