Bitcoin Price Stands Firm in the Face of Asian Stock Selloff
Bitcoin’s price held its ground on Monday, as Asian stock markets plunged following the latest round of U.S.-China trade hostilities.
The bitcoin price traded as high as $10,650.00 on Bitstamp for a gain of 5.1%. The BTC/USD exchange rate was last seen hovering at $10,356, up 2.2% for the session.
The largest cryptocurrency by market capitalization faces immediate resistance at $10,550, which corresponds with the 30-day exponential moving average. Bitcoin’s underlying momentum remains weak, with the daily relative strength index (RSI) holding well below 50.
At current values, bitcoin has a total market cap of $185.4 billion, where it accounts for just under 69% of the overall crypto ecosystem.
Trading in BTC has picked up over the last 24 hours, with volumes exceeding $1.2 billion on verified exchanges. Binance continues to be the single largest market for BTC spot trades at $496 million. Coinbase is second at $191.7 million.
Trade-War Rattles Global Markets
Bitcoin returned above $10,000 on Friday after President Trump vowed to step up his trade war with China. In a series of tweets, the U.S. president urged American businesses to look for “an alternative to China.” Trump’s tweetstorm came after China announced new tariffs on $75 billion worth of American goods.
The resulting stock-market selloff, which saw the Dow Jones Industrial Average plunge more than 600 points, spread to Asia on Monday. China’s Shanghai Shenzen CSI 300 Index plunged 1.4% to 3,765.91. Hong Kong’s Hang Seng Index was down 1.9% to 25,660.33. Japan’s benchmark Nikkei 225 index closed down 2.2% at 20,261.04.
Meanwhile, the offshore rate for the Chinese yuan plunged to record lows, fueling fresh concerns about capital flight from East Asian markets.
The flight from risk drove investors into the safety of gold and other precious metals. On Monday, gold futures peaked at $1,565.00 a troy ounce on the Comex division of the New York Mercantile Exchange, the highest in over six years.
Bitcoin has decoupled from gold in recent weeks after trading in close lockstep with the yellow metal earlier this year. If bitcoin does become “digital gold,” investors should expect it to move in lockstep with bullion during periods of heightened economic and political risks.
Despite underperforming gold in recent weeks, bitcoin remains the top-performing major asset of the past seven months. The cryptocurrency rose more than 350% between December and June and has only recently entered a consolidation phase. Bitcoin is currently trading roughly 25% below its June peak.
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 CoinMarketCap.