INDIA – 2019/12/04: In this photo illustration a popular decentralised digital currency, Bitcoin … [+]
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A rally in cryptocurrencies that began last week following the rising tensions between the US and Iran held well, as tensions eased..
By late Saturday, Bitcoin was up 10.18%, ETH was up 7.18%, XRP was up 11.49%, and LTC gained 18.60%. Bitcoin rose and stayed above the key $8,000-mark.
The rally was broad, with only 72 cryptocurrencies advancing out of the top 100.
That’s certainly music to the ears of traders and investors, who have been on the long side of the market.
Bitcoin and other major cryptocurrencies have emerged as a safe haven hedge against geopolitical events like trade wars, terrorist attacks, and regional military tensions.
“This week saw BTC rally almost 10% off the back of Iranian missile strike news,” says Nicholas Pelecanos, Advisor to NEM Ventures. “This rally further cements the narrative of BTC being used as a hedge against global uncertainty as it rallied in line with gold. Narratives are important in the crypto market and whether true or not, to begin with, can often become self-fulfilling.”
Ashish Singhal, CEO, and Co-Founder at CoinSwitch.co and CRUXPay, agrees. “US/Iran tensions have created uncertainty in the markets pushing safe havens like Gold and Crypto to pump. With economic uncertainty, many investors see crypto as a constant — something that will always have worth, even if the economic system is going through uncertainty,” he says.
But why did the rally hold on as tensions eased? For a couple of plausible reasons.
One of them is that traders believe that the US/Iran tensions aren’t over, and they could worsen at any time.
Then there are technical factors supporting the rally. “Technically BTC has broken out of the down-trending channel it has been trading in since late June 2019,” says Pelecanos. “Halvening years often yield high returns for the asset, so this break out could be the start of a new bull market that could lead to new all-time highs, $9,000 USD is the level I’m eyeing, a solid close above this level will invite the bulls in to play.”
Nick Cowan, CEO of the Gibraltar Stock Exchange (GSX), isn’t that optimistic.
“After the rally through 2019, we have seen BTC roll over and technically go back into a downtrend,” he says. “However, we have seen significant volumes between the levels of $6,000 and $8,000 which signals accumulation – so my read would be that support is there at the 7,000 level and unless I see something to point towards bears winning, it seems that any good news such as an ETF approval could spark a push back up from those levels.”
Bullish traders and investors should be looking forward to such development.