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The average budget deficit of the United States will never be less than $1 trillion per year in the future or 4.5% of GDP, worrying data on the fiat economy shows.

Compiled by the U.S. Congressional Budget Office (CBO) and shared by crypto hedge fund manager Travis Kling on Jan. 21, statistics reveal that the annual deficit is set to hit $12.2 trillion for the entire 2020s.

Such deficits would be significantly larger than the 2.9 percent of GDP that deficits averaged over the past 50 years, the CBO itself commented when it released the projections last September.

U.S. average budget deficit 1969-2029. Source: CBO

$1 trillion is more than six times the market cap of Bitcoin (BTC) and four times the market cap of all cryptocurrencies combined.

The data concerned Kling, who like other Bitcoin proponents has drawn clear distinctions between the cryptocurrency and fiat currency.

As Cointelegraph reported, the deficit is not the only worrying aspect of U.S. economic policy to surface in numbers in recent months. Late last year, it emerged that the countrys total debt is now higher than ever at $23 trillion, while the worlds total debt is $255 trillion or $12.1 million for each Bitcoin.

In simple terms, budget deficits occur when the value of a countrys spending exceeds the value of its revenues. As Kling notes, governments can use fiat to plug the difference, allowing them to increase the money supply which they can then direct as desired.

Over the New Year period, the Federal Reserve added $425 billion to the dollar supply.

The process has its roots in Keynesian economics, which calls for states and central banks to manage the money supply instead of allowing the market to decide prices for goods and services.

Such a setup creates a problem known as the Impossible Trinity attempting to achieve free capital flows, a fixed exchange rate between currencies and independent monetary policy.

Imagine the allure as a politician of promising your constituents all the spending they want, w/o ever having to raise taxes. Spend more AND cut taxes! There's no inflation! Kling wrote on Twitter.

He concluded:

This has been tried many times before in monetary history and there is no example where it ended well.

As Saifedean Ammous explains in his book, The Bitcoin Standard, preventing meddling by governments and central banks would reverse the processes which lead to phenomena such as deficits. This is because fiat would cease to be money by decree as its name implies, and would instead operate without a central authority, similar to Bitcoin.

Read more here:
US Deficit Will Be at Least 6 Times Bitcoin Market Cap Every Year - Cointelegraph

Since Bitcoins genesis block was first mined, the cryptocurrency has been caught within a whirlwind that has allowed BTC to post gains that defy historical precedent.

Although the past couple of years have tempered the excitement surrounding the cryptocurrency, it is important to note that multiple bullish factors are fast approaching on the horizon, and the combination of these factors suggest that BTC could be en route to setting fresh all-time highs.

One interesting factor that should be noted is that the convergence of two key trendlines formed over the past five years coincides strikingly close with the cryptocurrencys upcoming mining rewards halving event signaling that fireworks could be imminent.

Over the past few days, Bitcoins price has been oscillating between the lower and upper-$8,000 region, with this ongoing consolidation phase coming at the tail end of its recent multi-week uptrend.

Although the near-term prospects for Bitcoin remain foggy, its mid-term outlook might just be more bullish than ever, as BTC is close to reaching the apex of a massive bull flag comprised of two trendlines that have been formed over a multi-year period.

Interestingly enough, the apex of this pennant coincides precisely with the anticipated date of Bitcoins upcoming mining rewards halving in May, which suggests that this time period could be a historical pivoting point for the cryptocurrency.

5 years of trendlines perfecting coinciding with the most highly anticipated event in BTC history. Fireworks in store! Travis Kling a partner at the Ikigai Fund explained in a tweet while pointing to the below chart.

While BTC remains stuck beneath the coveted five-figure threshold at $10,000, it is difficult to realistically muse the possibility that it will soon be trading at $100,000 or more.

This may not be as farfetched as one would assume, however, as Galaxy, a popular cryptocurrency analyst on Twitter, explained in a recent tweet that a break above the descending resistance formed since the 2017 rally could lead Bitcoin straight to $100k minimum.

Breaking the green line will be what triggers the next parabolic movement that will take us to $100K minimum. Save this picture. You are not late. You are early.

It just so happens that this trendline is the same upper boundary as the one seen on the chart referenced by Kling, which signals that BTC could be just mere months away from an explosive movement to fresh all-time highs.

See the rest here:
Five Years of Bitcoin Trendlines All Lead to This One Point; Fireworks Inbound - newsBTC

Bitcoin price has been falling over the last 24 hours, potentially signaling that the recent bull rally has come to an abrupt end.

But what are the factors behind Bitcoins latest drop, and how far might the crypto asset dive before it finds support?

The leading cryptocurrency by market cap has spent the last six months locked in a downtrend. However, that downtrend was considered broken by many during the recent bull rally in Bitcoin, causing many to expect at least a short-term uptrend to follow.

Related Reading | Current Bitcoin Trend is Repeating the Bull Run to $20k in 2017, And Its Mega Bullish

And while Bitcoin price did rise as much as 35% in less than 30 days, it failed to break through overhead resistance and reclaim past highs.

Now, as of this morning, Bitcoin price pierced through $8,300 temporarily after a more than $400 selloff began in the late-night hours.

The crypto asset is back above $8,300 currently, however, it is not until prices much lower where Bitcoin could find support.

The drop in price is surprising for many, but there may be a variety of factors influencing the bearish movement.

Notably, Bitcoin price failed to break above the 200-day moving average, which may have signaled to larger investors that the crypto asset wasnt yet for a new uptrend, and started to sell the asset to reduce risk.

Bitcoin price may be headed back to retest the 50-day moving average, which is currently sitting at around $7,500.

Before it reaches that key level where support could be found, the cryptocurrency is likely to test support levels at $8,000 to $8,200, then lower at $7,600 to $7,800.

The leading cryptocurrency by market cap must not fall back below $7,400 where the inverse head and shoulders breakout confirmed, or else a new low could be set in the days following.

With Bitcoins halving ahead, and after two full years of bar market, it could be on the verge of a major breakout. But for that to happen, the 200-day moving average must be taken, with multiple daily closes above it along with a retest of resistance turned support.

Related Reading | The Case For Why $6,400 Wasnt Bitcoins Local Downtrend Bottom

In the worst-case scenario, the current top could follow the path of the July 2018 rally, which eventually led the cryptocurrency to reach its current bear market low of $3,100.

Breaking down to set a new local low, could cause the market to panic, and a retest of the lowest ranges over the last two years may need to be tested and confirmed as support for an uptrend to begin again.

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Bitcoin Price Breaks Below $8,300, Is The Bull Rally Already Over? - newsBTC