Bitcoin price closed above $9,100 in a surprising upside move after trading sideways for the entire Asian and early European trading session Wednesday.
The benchmark cryptocurrency topped near $9,191 less than two hours ahead of the New York opening bell. The wild move upside took only a couple of hours to rise by almost $350. It accompanied rising trading volumes, thereby leaving hints of a breakout move towards $9,500.
Bitcoin’s gains also followed a 10 percent downside correction after it failed to break above $10,000. That left the cryptocurrency under the risks of continuing its prevailing trend unless traders are willing to buy the next local tops.
Dow jumps more than 300 points
Bitcoin’s rise also took cues from a similar price rally in the Wall Street indices.
After being shut down for more than two months, the New York Stock Exchange’s trading floor partially reopened on Tuesday.
Dow Jones Industrial Average futures were up 344 points, or more than 1%. S&P 500 futures also pointed to strong gains. Recent hopes for a return to normal consumer habits have pushed the Dow Jones Industrial Average and S&P 500 to the cusp of key market levels for the first time since early March.
Source: CNBC
On Wednesday, the Mortgage Bankers Association reported a sixth straight weekly rise in mortgage applications. Data released Tuesday showed new home sales in April topped estimates. Sales of new U.S. single-family homes increased by 623,000 last month, beating estimates of 490,000, according to Dow Jones.
All 50 states in the U.S. have reopened their economies to some extent. On Tuesday, New Jersey Gov. Phil Murphy said the state would allow professional sports teams to resume practice and competitions.
Peter Tuchman at the New York Stock Exchange on March 9, 2020.
Bitcoin, which was sitting atop 150 percent profits from its March 2020 low, became a profit-taking destination, which caused a price drop. On the other hand, the Wall Street indices surged higher on optimism that economic activity is picking momentum after months of pandemic-induced lockdown.
Meanwhile, the rallies in both Bitcoin and Dow Jones appeared against the backdrop Federal Reserve’s open-ended stimulus program. Analysts believe that higher levels of liquidity helped the markets grow higher, thereby establishing a positive correlation between risk-on and risk-off sets.
Hong Kong crisis, boosting Bitcoin bullish
Chinese government recently proposed a new security law for the region of Hong Kong, a special administrative region in China formerly of the British. “Growing terrorism” is the stated premise of the bill, but many in the global community and many of Hong Kong’s citizens think that it is an encroachment on democracy in the city.
President Donald Trump said in a presser on Tuesday on the Hong Kong news:
“We’re doing something now. I think you’ll find it very interesting … I’ll be talking about it over the next couple of days.”
While Trump suggested that thus far, the administration is not thinking of sanctions, officials and advisors to the White House have said that this could change.
Due to the fears of sanctions on China, the value of the Chinese yuan has sunk against the U.S. dollar, reaching lows not seen since the peak of the trade war last year.
“In Spring/Summer 2019, the Chinese Yuan fell to all-time lows vs the USD, and contributed greatly to BTC appreciation. Conversely, when the Yuan strengthened in Fall 2019, BTC tumbled. Guess who’s back to all time lows?”
Read more:
- Hong Kong People Turbocharging Bitcoin Adoption As Demonstrations Against Chinese Interference In The Country
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