Bitcoin jumped above $9,500 in midday Thursday trading.
The gains sustained on safe-haven bids Friday as tensions between the U.S. and China escalated further.
Beijing moved ahead with its plans to impose a new national security law in Hong Kong, prompting President Donald Trump to hold a press conference on Friday.
A new wave of buying sentiment pushed the bitcoin price above $9,500 for the first time in more than a week.
The benchmark cryptocurrency hit $9,625 ahead of the New York opening bell Thursday. The move uphill appeared alongside early morning gains in the top Wall Street indices. The benchmark S&P 5oo, for instance, rose 3.29 percent on optimism over the easing lockdown measures in the U.S.
SPX closed Thursday 0.21 percent lower after a last-hour selloff | Source: TradingView.com
Nevertheless, the index erased gains in the last hour of trading after President Donald Trump announced that he would hold a press conference about China on Friday. The statement entered wire after Beijing approved the proposal to introduce a new national security law in Hong Kong.
But the news didn’t shake Bitcoin. The cryptocurrency, which was almost moving in tandem with the S&P 500 since March 2020, maintained gains above $9,500, a crucial support level.
A $10,000 Retest
Bitcoin’s latest upside move raised its possibility of retesting $10,000 as its next upside target.
BTCUSD maintaining price floor near $9,500 | Source: TradingView.com
The cryptocurrency maintained a price floor above $9,500 after stocks fell, verifying a short-term break from their correlation. The escalating rift between the U.S. and China spoiled risk-on mood and raised demand for safe-havens.
Bitcoin surged alongside Gold this time, a top hedging asset in times of macroeconomic and geopolitical uncertainty. Investors anticipated negative long-term consequences from a souring U.S.-China relationship.
The sentiment prompted them to seek safety in perceived safe-havens, benefiting both crypto and yellow metal.
Depending on what Trump says in his press conference on Friday leaves both Bitcoin and Gold in a conflicted bias area. In the Bitcoin market, particularly, traders could profit-take the latest rally. The move could lead the cryptocurrency to lower below $9,500.
Meanwhile, if Trump decides to move forward with its proposal to remove Hong Kong’s special trade status – or, for worse, impose sanctions against China, then it could prompt Bitcoin bulls to retarget $10,000 over the weekend session.
Downside Risks for Bitcoin
Even a move towards $10,000 would keep Bitcoin bulls from extending it any further, according to their recent behavior around the level.
Traders continue to sell-off the said top, which also coincides with a 2.5-year-old Descending Trendline (the red line). Since May 6, they have made a total of eight attempts at breaking bullish over $10,000 but failed every time. One of the bearish pullbacks took the bitcoin price towards $8,700.
That said, Bitcoin continues to trade forward in a bias-conflict zone. If it breaks above $10,000, then a rally towards $11,500 looks achievable. Else, a revisit to $8,700, followed by an extended breakdown towards $8,000 looks more likely.
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