Bitcoin’s ‘Blow-Off Top’ Prediction After Trump’s Second Term Win: An Economist’s Perspective

Following Donald Trump’s victory in the 2024 US presidential election, the cryptocurrency market, particularly Bitcoin, experienced a surge in price. This bullish sentiment stems from Trump’s pro-crypto policies, including plans to establish Bitcoin as a national strategic stockpile, replace the Securities and Exchange Commission (SEC) Chairman Gary Gensler, and implement a crypto-friendly regulatory framework. While many experts foresee a promising future for Bitcoin under Trump’s leadership, renowned economist Henrik Zeberg offers a cautionary perspective. Zeberg warns that Trump’s economic policies, particularly his focus on tariffs to stimulate domestic growth, could trigger a US recession, leading to a “blow-off top” scenario for Bitcoin and the broader cryptocurrency market. He draws parallels between Trump’s tariff strategy and the Smoot-Hawley Tariff Act of 1930, which is widely recognized as a key contributor to the Great Depression.

“Now everything is lined up for history to repeat itself. US Tariffs implemented into a Recession—reinforcing the downturn and popping the Greatest Bubble ever,” Zeberg stated on X, referencing the historical economic crisis. Zeberg’s analysis, based on Fibonacci extension levels, suggests that Bitcoin could experience a rapid price surge, potentially reaching a peak of $115,000 to $123,000. He believes this surge could be short-lived, leading to a significant correction in the market. Zeberg’s analysis highlights several key Fibonacci levels that could act as resistance points during Bitcoin’s ascent. The 0.382 level at $77,437.88 represents the initial resistance following the breakout from the previous all-time high. As the price climbs, the 0.618 level at $85,205.47 could serve as minor resistance. The 1.0 level at $107,435.71 represents a crucial psychological and technical threshold, while the 1.27 level at $123,148.19 indicates a potential overshoot beyond the primary target zone. Zeberg’s prediction raises concerns about the potential for a significant market correction following a rapid price increase. The economist’s warning serves as a reminder of the inherent risks associated with investing in cryptocurrencies, particularly during periods of political and economic uncertainty.