Bitcoin Rallying Hard, Gold Rallying Hard – Not a Coincidence
- Bitcoin price jumps to almost $8,470 with strong volume after Iran fired a dozen missiles at US bases in Iraq
- “A very classic risk off,” as both gold and bitcoin price jump
- Bitcoin’s re-accumulation bottom completed, $10,400 coming?
This week Bitcoin is making a lot of movement that has us at the level we were at in mid-Nov.
First, on Jan 3rd, Bitcoin jumped from $6,850 to well above $7,400. Now today we shot past $8,000 to nearly $8,470.
The first surge in price has been after a US airstrike killed Iran’s general Qaseem Soleimani. Now, this another jump in price came after Iran’s missile attack on US-led forces in Iraq on early Wednesday. This attack came hours after the funeral of the Iranian commander whose killing in a US drone strike has raised fears of conflict in the Middle East.
Gold and Digital Gold in “Clear Focus”
This has the price of gold soaring, hitting their highest since March 2013 at $1,603.73 per ounce, as per goldprice.org. “It's a very classic risk off,” said Rob Carnell, Asia-Pacific chief economist at ING in Singapore.
As Mati Greenspan, founder of Quantum Economics says, “Gold rallying hard. Bitcoin rallying hard” is not a coincidence.
The jump in the price of gold and digital gold is viewed by investors as a safer asset in the time of political and economic uncertainty.
The data clearly points out that both Bitcoin and gold are in “clear focus” as tensions between the US and Iran escalate. As Bitcoin enthusiast Rhythm trader notes,
“This is one of the first times we've seen BTC trade w/ a correlation to macro headlines in ~2+ years (when it took a lot less $$). Correlation =/ causation but its enough to start a narrative around BTC as people enter the new year with 0 PnL and assess portfolio allocation.”
“Price and volume are everything”
Though prices have started to correct a bit, Bitcoin’s not as much as other assets. At the time of writing, BTC/USD has been trading at $8,334 up 5.49% as per Coincodex.
Markets on Iran attack:
S&P – Dumps, retraces overnight
Oil – Pumps, retraces overnight
Gold – Pumps, retraces overnight$BTC: Pumps, flat overnight
Bitcoin does not yet trade like other macro assets, but this is a good thing! Not being correlated to these markets has value. pic.twitter.com/Qfg3EHvb7M
— Ceteris Paribus (@ceterispar1bus) January 8, 2020
What's good about these moves is the strong volume they are backed by. From last week, the trading volume has gone up from less than $200 million to $1 billion this week and currently $1.65 billion. Trader Scott Melker,
“Price and volume are everything. When price and volume rise together (like they are now), it is incredible bullish,”
“When price rises and volume decreases, watch out.”
People are currently very bullish as calls are trading more expensively, says trader Cantering Clark which means, “the market not currently looking very interested in hedging downside risk.”
Re-accumulation bottom completed, $10,400 Coming?
Amidst this bullish momentum, market analyst Benjamin Blunts says this is a critical level we need to watch out for to see if this is breaking of the trend or we go up in 5wave marking the bottom. However, he’s not shorting the market and is seeing $10,400 coming up.
According to analyst Willy Woo, a move up might be in order as while pointing to his previous tweet where he called for the market to have already hit the bottom in early December, this latest move up has him now noticing,
“One month later from this on-chain momentum switch, re-accumulation bottom completed. Daily candle closed just minutes ago and we're above the bearish channel that held us for 6 months.”