Bitcoin Holds Gains as U.S.-China Trade Tensions Heat Up
Bitcoin’s price bounced around the $12,000 mark on Thursday, as the market consolidated a multi-week rally in the face of growing U.S.-China trade tensions.
The bitcoin price was back above $12,000 on Thursday, albeit briefly, reaching a high of $12,031.31 on Bitstamp. The largest cryptocurrency peaked above $12,300 earlier in the week but has not returned to that level.
As of 8:47 a.m. ET, the BTC/USD exchange rate was down 0.8% at $11,875. Compared with 24 hours ago, bitcoin’s price was up 0.8%, according to CoinMarketCap.
Based on the daily chart, bitcoin’s technical picture hasn’t changed very much in the last 48 hours. The relative strength index (RSI) continues to hold above 60. Price action has also picked up sharply over the past week, with the 30-day and 100-day exponential moving averages (EMAs) trekking higher.
Trading in bitcoin remained elevated on Thursday, with the ten largest verified exchanges processing more than $2.05 billion worth of volume, according to Bitwise. Binance processed $874 million worth of BTC trades, more than two-and-a-half times higher than Coinbase.
Based on current values, the Bitcoin network has a total value of $212.2 billion, which represents 68.9% of the overall cryptocurrency market.
China Sets Yuan Midpoint Above 7
On Thursday, the People’s Bank of China (PBOC) set the official reference rate for the yuan renminbi at 7.0039 per U.S. dollar, the weakest in over 11 years. It was the second time this week that the Chinese currency was allowed to slide above the pivotal 7 U.S. level.
The yuan-dollar exchange rate first breached that level on Monday, prompting the Trump administration and Treasury Department to label China a “currency manipulator” for the first time.
As CNBC reports, Beijing allows the yuan to trade within a range of 2% against the dollar from each day’s midpoint level.
It’s no coincidence that the yuan was allowed to slide mere days after President Trump announced a new round of tariffs on Chinese exports to the United States. Beginning September 1, $300 billion worth of Chinese goods will face 10% duties upon entering the U.S. In response, China appears to be seeking a “controlled depreciation” of the yuan without creating the expectation that it will fall too heavily.
Trade negotiations between the U.S. and China resumed last week after a nearly two-month hiatus. The two sides remain far apart on major issues like Chinese industrial policy. It’s looking increasingly likely that a deal won’t get done anytime soon. Even President Trump has warned that Beijing may be looking to delay a final agreement until after the 2020 presidential election.
In the meantime, global equity markets have been in a state of flux. Gold and bitcoin have surged while equities have plunged. As Hacked reported on Wednesday, bitcoin and gold are trading in lockstep with one another for the first time in three years.
Disclaimer: The author owns Bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
Featured image courtesy of Shutterstock. Chart via TradingView.