By CCN Markets: Price of Bitcoin established another year-to-date high on Friday, touching levels not seen in over a year. Earlier during the Asian session, the bitcoin-to-dollar exchange rate flew past the $9,800 level for the first time since May 6, 2018. As of 0200 UTC,…
By CCN Markets: Price of Bitcoin established another year-to-date high on Friday, touching levels not seen in over a year.
Earlier during the Asian session, the bitcoin-to-dollar exchange rate flew past the $9,800 level for the first time since May 6, 2018. As of 0200 UTC, the pair settled a fresh yearly high towards $9,812 on Coinbase exchange, up 5.92 percent on a 24-hour adjusted timeframe. Bitcoin futures on CME also surged to establish its 2019 peak of $9,840.
The price rise appeared 12 hours after the Federal Reserve agreed to the possibility for a rate cut in July, carrying the yield on the benchmark US 10-year Treasury note down below 2 percent for the first time since November 2016.
At the same time, the US dollar index, which measures the greenback against a basket of high-profile national currencies, remained under pressure in the mid-96.00 level. The index is now facing heat in the form of an imminently rising selling bias, as investors price in their “insurance cuts.” A clear example is Gold, the haven asset whose spot rate on Friday soared past $1,400 per ounce for the first time since September 2013.
“The negative correlation between the gold price and US dollar has driven investors into gold ahead of any weakness in the US Dollar,” David Lennox of Fat Prophets told CNBC. The resource analyst added that a rate cut would weaken the dollar which, coupled with “heightened geopolitical landscape” will drive investors to haven assets.
Rising political tensions between the US and the Middle East, lower bond yields, and a weaker US dollar are proving to be bullish for gold. It would be safe to assume that the same factors would also make 2019 an exciting year for bitcoin, a decentralized asset which has already delivered more than 160 percent returns on a year-to-date basis.
Mark W Yusko of Morgan Capital Creek said on Friday that bitcoin has the same qualities as that possessed by gold. The asset manager added that the cryptocurrency is even superior to gold on certain levels, which would make it an ideal hedge against the weaker dollar sentiment.
“Look at long term gold price chart, same types of parabolic moves and crashes,” said Yusko. “There was a time, not that long ago when no one owned much gold and didn’t think about it as an investment. Bitcoin
has many of same qualities with a number of superior attributes.”
As CCN covered earlier, bitcoin price is currently attempting to test a top of a large falling wedge pattern, which now sits near $12,000. Technically, the price has already broken out of the wedge, has closed above the higher lows of the said wedge pattern, and is now waiting to cakewalk above $10,000.
A close above $9,948 could push bitcoin towards $10,000, a psychological resistance level. The asset will likely see a sharp pullback, which would bring it back towards $9,948 as interim support. Nevertheless, a break above $10,000 would allow bitcoin to reclaim the $11,238-11,779 area, which is visibly the breakout target of the large falling wedge in red, as discussed above.
The probability of a further upside has grown higher following the Fed’s rate hike confirmation. That’s one major catalyst one can count on to maintain their interim bullish bias in the bitcoin market.
Click here for a real-time bitcoin price chart.
This article was edited by Samburaj Das.
Last modified: January 11, 2020 12:58 AM UTC