Bitcoin price (BTCUSD) is up sharply today. The biggest cryptocurrency is trading at $10,205, which is a few pips points below the intraday high of $10,365. It is in its third straight day of gains and is in the highest level it has been since May this year. Why is the price of Bitcoin rising?
Rush to safety and dollar weakness
Bitcoin price is rising because of traders’ rush to safety as the conflict between the United States and China escalates. Over the weekend, the Chinese military moved its troops for exercises at the South China Sea. According to the Nikkei, these exercises will last through the coming Sunday.
The decision to send the military to the disputed waters comes at a time when China and the US are going through their toughest crisis. In the past few days, the two countries have ordered the closure of consulates and the US has called for end of the long-standing “engagement” policy.
As the tensions rise, investors have flocked to the so-called safe havens. Today, gold price reached an all-time high while silver rose to the highest level in years. Similarly, the Japanese yen rose by 0.45% against the USD while the Swiss franc has jumped by more than 0.30%. The US dollar index has fallen by 0.25%.
Therefore, Bitcoin price has jumped by more than 3% because investors see it as being a safe haven.
Short contracts liquidations
Bitcoin price has also jumped because of the liquidations of short contracts. According to reports, when the price crossed $10,000, it triggered the liquidation of overleveraged contracts. Similarly, when the price reached $10,200, more of these liquidations happened. In a report, Glassnode said that bulls had not moved to take profits as the price crossed the $10,000 level.
Bitcoin price is also rising because of the decision by the Office of Comptroller of Currency gave banks the permission to hold crypto custody. This measure is likely to see increased demand for the currency among institutional investors.
At the same time, some analysts now believe that Bitcoin Price is starting a significant rally. For example, Peter Brandt, an influential person in the crypto industry tweeted that he expects the price will reach $50,000. At times, such comments leads to increased demand, especially by retail traders.
Bitcoin price technical forecast
On the daily chart, we see that Bitcoin price has been in an upward trend in the past few days. We also see that the price found significant support at around 8,925. Also, the price is now above the 50-day and 100-day exponential moving averages and is also slightly below the important resistance at 10,441. Therefore, I expect that the upward momentum will continue if bulls manage to move above this resistance.
On the flip side, a move below the psychological level of 10,000 will mean that there are more bears in the market, who will be keen to push the price lower.