According to CryptoCompare, at 07:42 UTC on Monday (August 5), the Bitcoin price went above the $11,800 mark. This article considers what might be behind this latest rally.
At press time (07:47 UTC on August 5), BTC-USD is trading at $11,834, up over 10.55% in the past 24-hour period:
This the first time that Bitcoin has seen this level since July 20.
You could say that Bitcoin had a good weekend since between 00:00 UTC on August 3, when the BTC price was $10,518, and 00:00 UTC on August 5, when the BTC price was $11,212, its price rose 6.6%.
So, what are some of the positive macro factors behind this latest rally?
Su Zhu, CIO and CEO at Singapore-based Three Arrows Capital believes that due to the escalating trade war between China and the U.S., China might be considering trying to get around the higher U.S. import tariffs for some of its goods by devaluing its national currency, the Renminbi (RMB), which is also known as the Chinese Yuan (abbreviated CNY or CNH depending on whether it is traded onshore or offshore), and allowing USD/CNH to rise above the symbolic level of 7.00:
Strategists believe that if trade talks break down, China will have no more incentive to defend 7 on USD/ $CNH
Probability of breaking 7 by end of year, implied from options markets, has doubled in the past week
Time to pay attention pic.twitter.com/EEi2nMOGPL
— Su Zhu 🦁 (@zhusu) August 5, 2019
In fact, the USD-CNH rate reached 7.03 earlier today, a level last seen in March 2008.
Also, the recent protests in Hong Kong (over proposed extradition bill), which have led to today’s general strike over there, might be causing more Chinese investors to get into safe haven assets such as Bitcoin and gold, the price of which went over 10,000 CNY earlier today, according to Dovey Wan, Founding Partner at Primitive Ventures:
Today we have seen – $CNH breaks out 7 $KRW breaks out 1200$GOLD breaks out 10000 CNY pic.twitter.com/5xJnvQMn7I
— Dovey Wan 🗝 🦖 (@DoveyWan) August 5, 2019
Wan also believes that the escalating trade war between Japan and South Korea might also be acting as tailwind for Bitcoin:
💥💥💥 USD/KRW, today also breaks the very strategic level of 1200 KRW, as trade war between Korea and Japan intensities ..
“Chaos is a ladder”
But for whom 😈 https://t.co/kJmRrXiOCU pic.twitter.com/m3BJbnzC7i
— Dovey Wan 🗝 🦖 (@DoveyWan) August 5, 2019
Indeed, over on South Korea’s KOSDAQ (an electronic stock market like NASDAQ), things are not looking so good:
JUSTIN IN ..
Korea KOSDAQ index tumblers 7.5% today ..💥💥💥 worst day since 2011 🤯🤯🤯
What a violent end .. pic.twitter.com/Dt1F4RtdrE
— Dovey Wan 🗝 🦖 (@DoveyWan) August 5, 2019
As for the altcoins, Bitcoin’s strong price action seems to have lifted the mood of the whole crypto market, with most of the top 100 cryptoassets currently in the green.
Here are how a few of the most popular altcoins are currently doing:
Featured Image Credit: Photo via Pixabay.com
