Bitcoin Poised for a Run at $8k Says Trader but Extreme Low Volume Not a Positive Trend
- Bitcoin, an uncorrelated asset moved along with gold as demand for safe-haven assets rose due to geopolitical tensions in the Middle East
- Bitcoin might Moon if there is a war with Iran as it is the “best place” for flight capital – Clem Chambers of ADVFN.com
- Trading volume meanwhile is below $200 million and dropping further on weekends
Four days into 2020 and Bitcoin saw a surge of 8% where it went from $6,850 to above $7,400.
As we reported, Bitcoin spiked in value just like gold which was because of the geopolitical tensions in the Middle East after the US airstrike killed Iranian general Qaseem Soleimani that pushed the demand for safe-haven assets.
Iran has been one of the “hotbeds” for Bitcoin adoption, propelled by the crippling US sanctions and its unstable economy.
Mati Greenspan, founder of investment firm Quantum Economics in his Friday newsletter points out how
“Until today bitcoin has largely been seen as an uncorrelated asset that does not usually react directly to what's happening in other markets.”
Nice to see$btc react to global uncertainty. #digitalgold
— Michael Novogratz (@novogratz) January 3, 2020
Iran an unlikely driver
However, he notes that the Iranian market in itself is likely “too small and slow” to have caused this 8% upwards move in BTC price single-handedly.
What’s more likely is “one or several players have been waiting on the side for a good buying opportunity below $7,000 per coin and it seems one has presented itself.”
Economist and trader Alex Kruger also said that the narrative of Bitcoin being a safe haven and soaring because of Iran is “absolute nonsense.”
But Bitcoin might Moon if there is a war with Iran
Clem Chambers, CEO of private investors website ADVFN.com, however, says, Bitcoin will “moon” if the US has a war with Iran.
In the longer term, he says whenever there is trouble in the capital controlled countries like China and Iran, Bitcoin will be a “key asset.” This is because,
“while there are trillions in gold and oil to suck up demand, there is only a smattering of bitcoin to take the sort of buying surge a country like Iran could create were the situation to spin up into a large scale conflict.”
Bitcoin, according to him, is the “best place” for flight capital for those wanting to protect their assets.
In the short term, $8k is next
No matter the reason, Kruger sees Bitcoin heading higher.
Currently, the world’s leading cryptocurrency is trading at $7,298 with 24 hours gains of 0.72%, as per Coincodex. Meanwhile, trading volume is still low at below $200 million.
The 7-day average real trading volume has been continuously moving down. On January 1st, 2020, the volume was as low as $192 million. This level was last seen in April 2019.
During the weekends also the volume remains low. In fact, the middle of the week sees over 50% more volume than weekends, unlike earlier last year. Arcane Research notes,
“Although this could be related to the holiday period and less activity during weekends, this is not a positive trend for the leading cryptocurrency in the space.”