Could the result of the French elections trigger a debt crisis and a euro crisis? José Luis Cava points out that France has an uncontrolled public deficit, with a public debt/GDP ratio of approximately 110%. And the public deficit/GDP will probably be slightly above 6%, breaking European rules.
When one sees the parties that compete in the elections, both left and right, they have a common factor: everyone wants to increase the public deficitsays the expert. “Therefore, it is conceivable that this runaway public deficit will continue whatever the outcome of the elections.”
What is the European Union going to do? In certain situations, could France be rescued? “Initially, The European Central Bank could buy French bonds, but it is evident that both Brussels and, above all, Berlin, are going to oppose it. Because of course, it makes no sense for you to buy public debt so that politicians can continue spending like crazy. Therefore, from that point of view, tensions will arise.”
Taking into account that you cannot be expelled from France, can you go to France of your own free will? “The political party, both left and right, that wanted to adopt that decision would most likely lose votes.” In the opinion of analysts, the first thing they are going to do is put pressure on the European Union by reducing the 3 billion contribution that France makes to the European Union. “Secondly, they are going to boycott the European Union from within, which will reduce cohesion and stability.”
Regarding Bitcoin, he points out that yesterday there was a strong trading volume and in addition “sales were recorded without looking at the price.” When this happens “it is clear that what is happening is that there are people who are liquidating long positions in the futures markets or liquidating leveraged positions.”
People were leveraged and were selling, and they didn’t care about the price because their losses were multiplying, Cava explains. Bitcoin is in a broad lateral movement and what it has done is go to the support side. “There is important support around 59,875which corresponds to the minimums of March, April and May. There it could bounce.”
Is there evidence that a soil has formed? , according to analyst no. “Therefore, I am one of those who believe that a drop at this level must be given time to form a bottom figure before buying again.” However, he points out that in the short term yes, and draws resistance around 61,800. He is drawing an inverted head-shoulders figure. Therefore, exceeding 61,800 could very likely favor the development of a rebound.”
Already focused on NVIDIA, the economist believes that what has happened is caused by the options markets, and would have nothing to do with the income statement. “In the options market there was a large concentration of call options around 140. The gamma was deeply positive. That’s why the value moved sideways, went up and moved sideways. Last Friday the triple witching hour occurred, and the gamma cushion disappeared, which means that dealers are not buying right now.”
Cava goes on to explain that people sell because they are in a resistance zone, and then they are already opening short positions by buying put options.
How far could it fall? For the analyst, As long as it is not able to overcome the resistance of approximately 127, “I will consider as the most likely scenario that it is in a short-term downtrendin the very short term, and we must give it time to draw a figure of exhaustion.”
