Digital Currency Revolution Series: Geopolitical Factors Propel Bitcoin’s Renewed Bullish Traction

Year-2019 has been conducive for the Bitcoin prices so far, it has been spiking constantly higher from the last couple of weeks, rose from the lows of $3,122 levels to the recent highs of $13,880 levels which is the 2019 highs (i.e. almost more than 344% in this year so far). We are now on the verge of hitting multi-month highs as it breaks-out $11k and the bulls again managed to reclaim Bitcoin price to $11.5k mark levels as the financial institutions are infusing investments into the crypto industry, this has been the major driving force that the prevailing bull run of Bitcoin prices.

Another significant factor in the ongoing bullish price run may be increasing demand for Bitcoin as a hedge against macroeconomic uncertainty.

Well, to better understand Bitcoin’s potential role as a hedge against liquidity risk, we run you through the cryptocurrency market functions and the industry developments in the prism of quite a few macroeconomic developments.

The mounting geopolitical risk and tighter financial conditions in the US leading to global growth concerns and weakness in the currencies of major US trading partners. (September – December 2016).

Escalation of US and China trade tensions posing systemic risks to global economic growth and placing further pressure on the RMB.

After a horrible bearish rout in 2018, the stunning turnaround thing is that the rapid spike in the value of Bitcoin price comes amid the severe financial crisis in the global markets, as the United States and China continue their hostile trade war. 

The slowdown in the global financial markets had been a persisting thing since 2018 owing to the geopolitical turmoil, be it trade tension between the United States and China, NAFTA negotiations, Brexit, the recent developments in this economic crisis has just worsened the circumstances.

President Donald Trump has recently Tweeted about a levy of 10% tariff on the consumer class goods being imported from China worth $300 Billion, which had largely remained unaffected by the trade war until now.

Consequently, to counter this development, the Chinese legislators and monetary authorities abstained Chinese firms from buying American agricultural goods that in-turn enabled their currency Yuan to depreciate to its lowest level since then. Hence, the U.S. Department of Treasury affirmed China as a ‘Currency Manipulator’.

Technically, after BTCUSD has bottomed out at $3,122 levels, consequently, the bullish engulfing pattern has occurred at $4,071.70 levels. 

The hammer pattern occurred at $9,519 level, consequently, the bulls have taken-off rallies above 7 & 21-DMAs upon hammer formation and spike above $11.5k mark with bullish DMA & MACD crossovers, Both leading indicators signal buying momentum with mild overbought sentiments.