Last week, U.S President Donald Trump announced additional tariffs for Chinese goods coming into the U.S. This announcement sparked an overnight surge for Bitcoin, giving back the bulls the momentum they much needed.
What would even be greater than the gains triggered then, was the even greater gains that would follow when China retaliated. Sure enough, China has on Monday announced retaliation measures which have seen Bitcoin jump by nearly 10%. In the early hours of the day, China announced that it will weaken the Yuan to the weakest level in more than a decade.
Furthermore, the Chinese government has directed all state-owned companies to halt agricultural imports from the U.S.
The U.S-China Money Printing Game
Donald Trump has in the past criticized China for manipulation of the Yuan by the government, threatening to play the money printing game like China.
This has been the exact case with the Yuan being lowered by the People’s Bank of China (PBOC) to seven to one, a position it has defended since 2008. One analyst stated that by doing so, the Chinese government was weaponizing the currency.
Bitcoin Responds With A 10% Jump, More Gains Ahead
In the wake of the new changes, Bitcoin has responded very positively and is now staring at the $12k position. In the last 24 hours, the digital asset has jumped by nearly 10% to reach $11,760.
There is some resistance around this position but if broken in the next couple of hours, the asset could rally to $12K before encountering major resistance. However, the asset is recording a low trading volume. This could see a bearish scenario play out as the asset has little support.
Since the trade war began at the end of last week, Bitcoin has made leaps and by the looks of it, the trade war will continue fueling it in the new week. Soon the U.S might look to further escalate the trade war with both governments trying to show dominance.
But as they continue to weaken their currency value more and more, holders will look for a safe haven in Bitcoin. This will continue driving prices and offering the bullish momentum desired in the asset.