Bitcoin has set an unprecedentedly low level of volatility. For weeks, Bitcoin continues to trade within a tight range. Though crucial support has held, bulls have failed to break above local resistance.
This has since seen investor interest drop and with it the daily trading volume. All along, market pundits have been predicting stormy waters in the near future. As such, there has been a sense that investors are looking for an excuse to push the market higher.
In the last few hours, there has been news of a possible catalyst. Despite continued criticism from the east, Chinese President Xi Jinping has signed the controversial Hong Kong Security Law. Both the U.S and U.K have condemned the new law which undermines the “One country, two systems” principle agreed between China and Hong Kong.
The U.S.-China trade war remains a potential trigger of ambivalence and the two countries have been accusing each other of propagating the ongoing world turmoil. With this new law, the U.S has made it clear that it is supporting Hongkongers who are largely against it. China in response has dismissed the U.S and asked it stays out of its domestic affairs.
With the trade war, it was clear that a feud between the two countries was a major boost for Bitcoin. China’s buy orders for Bitcoin were particularly high whenever there was provocation between the two countries. Citizens chose Bitcoin as the safe-haven asset whenever there is the uncertainty of economic growth in the two largest economies.
So far there has not been an official statement from either the U.S or the U.K. This is however expected in the next couple of days. If particularly the U.S provokes China, this could lead to a breakdown of the trade deal. It could further see new sanctions established between the two countries.
Any of these moves could quickly escalate and cripple the two economies.
Bitcoin is currently looking to break above $9,300 before a test and bullish confirmation above $9,500. Any positive trigger can boost Bitcoin past this from where FOMO will take over and push prices to the $12K highs. On the lower side, the $9K support remains critical with a breakdown below $8,800 being its bearish confirmation level.