Cryptocurrency News

Bitcoin faces $ 40,000 as Biden reveals new $ 6 trillion federal spending budget

Bitcoin (B T cWith the unveiling of US President Joe Biden’s new $ 6 trillion federal spending budget proposal, a $ 40,000 withdrawal could be boosted at the expense of United States dollars.

The President of the United States will announce a massive fiscal policy on Friday, the largest since World War II, to ensure investment in key infrastructure, education, and health projects. Reported the new York Times On 27 May.

Biden reportedly wants the federal government to spend $ 6 trillion in 2022. He also plans to increase total spending to $ 8.2 trillion by 2031.

Biden previously proposed significant tax increases on American’s richest companies and individuals to fund his large-spending program. But in his own words, it will take at least 2030 for the government to reduce its budget deficit. This means that the United States will face a large debt burden because it borrows money to finance Biden’s record proposal.

The US federal deficit increased from $ 4.17 trillion in January 2020 to $ 7.92 trillion in May 2020. Source: FRED

According to recent history, the landscape serves as an ideal bullish backstop for bitcoin. In March 2020, decentralized cryptocurrency rose 1,582% from its low of $ 3,858 as the US government spent to combat coronovirus to unprecedented levels.

On the other hand, the US Dollar Strength Index, or DXY, which measures the strength of the greenback against a basket of top foreign currencies after topping out in March 2020 amid a global market crash, crashed by 13.38%.

The DXY downtrend remains in 2021 despite the boom. Source: TradingView.

Meanwhile, Anthony “Pomp” Pompliano, a well-known bitcoin lobbyist and investor of Pomp Investments, predicts further declines in dollar bids.

“The government is proposing to push our country into more debt while destroying the value of our currency,” Pompliano said. “Historians will write that the government hastened the destruction of the world reserve currency because the citizens made them happy.”

Other analysts also leapt to proposing bitcoin – with its fixed supply – as a measure against a stagnant US debt curve.

Bitcoin by $ 40,000. Retrieved

new York Times’ DXY fell a modest 0.01% on the New York Opening Bell, while bitcoin reclaimed $ 40,000.

Bitcoin exceeded $ 40,000 in New York’s opening season. Source: Trading View

The BTC / USD exchange rate tested its 200-day simple moving average (200-day SMA; orange wave in the chart above) – which sits around $ 40,756 – for a breakout move.

If achieved, the pair will close their 20-day Exponential Moving Average (20-day EMA; Green Wave) – upwards of $ 43,655 to confirm their short-term bullish bias.