Bitcoin Continues Uptrend with $12k in Sight

Bitcoin ended the week with a $650 pump that saw it sail through $11,500 and leave those expecting a pullback shocked and liquidated. In a sign that the cryptocurrency is being seen more and more as a safe haven from the impact of global political actions, many continued to attribute the rise to growing tensions involving China as much as any technical indicators.

Is This 2013 Part 2?

From a geo-political point of view, we could be looking at something of a repeat of 2013 when Chinese demand helped the price of BTC surge from $113 to $1,150 in a matter of weeks. That particular bull run was driven in the main by Chinese retail investors looking for a quick return, but this time around the situation seems different, with the US/China trade war escalating and growing unrest in Hong Kong. This has resulted in the yuan dropping to 7 against the US dollar, its lowest in a decade. This has resulted in what a Bloomberg source called “capital flight out of China” as Chinese investors look for ways to shore up the value of their cash against the dollar. The Yuan hasn’t increased against the dollar in any meaningful way since July 30, during which time BTC has increased 22%, clearly showing who has made the better investment and just how clear this rationale is.

MACD Illustrates Changing Trend

From a technical point of view, the bullish scenario is not surprising. As we can see from the below chart, the MACD turned bullish almost a week ago, since when it has been on a steady incline.

macd

The last time we saw this scenario was at the start of June before BTC hit its 2019 high of $13,900. Of course the MACD can’t predict where price will top out, but we can see from the crossover that the general sentiment has changed from negative to positive, meaning that, for the time being, any dips are for buying. With the MACD having plenty of room to run and no sign that China’s twin problems will be brought to satisfying conclusions anytime soon there’s not reason for BTC to stop anytime soon.

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