Bitcoin continues to trade in a tight range between $20,000 and $21,000. The cryptocurrency was rejected at significant levels of resistance and may retest its annual lows of around $17,000.
At the time of writing, the BTC price is $20,600, representing a loss of 1.4% over the last 24 hours and a gain of 7% over the past week.
Since late 2021, when the cryptocurrency hit a record high of $69,000, Bitcoin has been on a downward trend. Since then, the price of BTC has lost nearly 60 percent of its value and may continue to decline in the near future.
Arthur Hayes, a former CEO of the cryptocurrency exchange BitMEX, asserts that a “Doom Loop” has started in the macroeconomic sphere. Hayes released the daily Euro (EUR) chart relative to the U.S. dollar through Twitter.
For the first time in twenty years, the European currency gained parity with its North American equivalent. Similar to Bitcoin, the Euro has had a downward trend since 2021 and may prolong its losses.
This decline was precipitated by the Ukraine-Russia war and the rise in inflation, which compelled central banks throughout the globe to take action by lowering their balance sheets or raising interest rates. The European Central Bank (ECB) was unable of taking meaningful action.
Thus adding to the currency’s collapse. This “Doom Loop” is a component of Haye’s scenario in which the Euro and U.S. dollar declined against Gold and Bitcoin.
This scenario started to unfold when Russia’s access to the international banking system was severed. In the future decade, nations and individuals will choose to purchase these commodities over fiat money produced by central banks. Hayes elaborated:
Bitcoin will flourish like gold succeeds (…). Why should any central bank “save” in any Western fiat currency when the operators of digital fiat monetary networks may arbitrarily and unilaterally expropriate their savings?