(https://cdn.coingape.com/wp-content/uploads/2019/05/16110828/bitcoin-eat-678x381.png)
Bitcoin broke above $8000 from $6000 in less than five days, the probability of which was lower given the current market sentiments. The recent parabolic rise is a rarity in the financial markets. However, it is not as rare in the crypto-markets.
The two most important factors that have been credited for the rise has been Institutional growth and the recent tension between the US and China which has favored the uncorrelated global asset, Bitcoin. Bitcoin, as the experts suggest is acting as a safe haven against the falling Chinese currency.
Anthony Pomp, the Founder of Morgan Creek Digital and a Bitcoin proponent tweeted,
” JP Morgan is telling people that the trade war between the US and China could boost safe haven currencies. Bitcoin is the best safe haven currency in the world. “
A leading cryptocurrency analyst, Dovey Wan cited a considerable correlation between the drop in Yuan and the rise in Bitcoin in a tweet. Correlation doesn’t often mean causation. However, the recent tension and increase in tariff rate by the US and China with the stocks plummeting, has had many experts analyzing this perspective.
https://twitter.com/DoveyWan/status/1128086520185933825
Eastern Hemisphere Driving Altcoin Prices?
The fact that the cryptocurrency market is operational 24/7 and trading occurs around the world like clock-work also makes the asset class different from traditional Exchanges.
Furthermore, the rise in the altcoins has been recorded in the early hours today suggest that the Chinese, Korean and Japanese markets also have a considerable effect on cryptocurrency markets. Notice three of the longest bullish candles in Ethereum [ETH] were recorded during early 0:00 to 4: 00 hours UTC.
(https://cdn.coingape.com/wp-content/uploads/2019/05/16103235/ethusd-4hour-1024x461.png)
ETH/USD 4-Hour Chart on TradingView (The market points corresponds to 0: 00-4: 00 Hours UTC)
The rise in the early hour 4-hour in Ethereum on 16th May 2019 is about 8% or $3 billion in terms of total Mcap. Furthermore, the rise in XRP on 14th and 15th May also came at the same time.
(https://cdn.coingape.com/wp-content/uploads/2019/05/16110022/xrpusd7-1024x461.png)
XRP/USD 4-Hour Chart on TradingView (The market points corresponds to 0: 00-4: 00 Hours UTC)
The Chinese Government has imposed several bans on cryptocurrencies. Recently, it imposed a ban on Bitcoin transactions through WeChat and also planned to extend the ban on mining activities in the country.
Gary Shilling, former chief economist at Merrill Lynch and president of A. Gary Shilling, an economic consulting and asset management firm told Forbes,
“They’ve [Chinese] been very stringent on moving money out of the country. Consequently, people look for any way they can take their money out … I wouldn’t be a bit surprised that bitcoin is a beneficiary of that.”
However, other leading economies in the Eastern Hemisphere, Japan, and South Korea have also been instrumental in the past in driving cryptocurrency prices. While there is no comprehensive data to confirm the volume in China and Japan. The current price action seems to re-affirm that believe strongly.
Source (https://coingape.com/bitcoin-cryptocurrency-china-japan-korea-rise-driven/)