Bitcoin makes swift breakthrough to $11,900
By looking at everything else happening, you can see why Bitcoin is rising.
Bitcoin has climbed out of the $10,000 range after spending an eternity in Bitcoin time (5 days – almost a whole week) below the psychological $10,000 barrier.
It started thoughtfully plodding through the $10,000 range late last week then unwound over the weekend by lingering over the view at $10,900. Refreshed, it went back to work, and on Monday, it absolutely dissolved most of the $11,000 range in a few hours flat.
The candles are Bitcoin, the orange and purple lines are CNY/USD and the USD index respectively, and the gold line is gold.
Why the sudden rise?
There are a few theories for this sudden rise. The first is some kind of technical analysis stuff. The second is that Bitcoin is one of those personified entities that really gets down to business on Mondays.
The third is that it's related to everything going on in the world right now, which is borne out by several points.
First, there's obviously a lot going on in the world right now – "geopolitical tensions" if you're feeling fancy – and there's a broad correlation between geopolitical tensions and Bitcoin prices lately.
Second, there's a clear correlation between Bitcoin and gold prices. Gold is the world's go-to safe haven asset, and the fact that Bitcoin is strongly echoing gold prices suggests that BTC is being perceived in the same way.
Third, Bitcoin is jumping right as currencies are dropping.
Part of this is just maths. When you're pricing Bitcoin in USD or CNY, a declining currency value means Bitcoin appears higher, relatively speaking. With the US dollar down 1% since 1 August, a cryptocurrency that's only up 0.5% against the US dollar is still down overall. We've seen short-term trends of Bitcoin moving opposite the dollar before, but it's increasingly looking like a rule.
However, what we aren't seeing is a CNY price premium. On the contrary, there seems to be a bit of a rush to sell on Huobi OTC at the time of writing, now that prices are nice and high.
The reference price in the above image is US$12,707 equivalent, while the race to the bottom has gone as far as US$11,518 equivalent.
But perhaps it makes more sense this way. You can buy up CNY with your Bitcoin now that prices are nice and low.
Disclosure: The author holds BNB and BTC at the time of writing.
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