Bitcoin Nears $11,000 as Yuan Fall on China Tariffs

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Shanghai port

Bitcoin has risen by about $1,000 in the past three days to now stand at $10,800 once again.

The rise of about 10% looks like a reversal, with bitcoin perhaps to continue maybe another slow attempt to take $14,000.

Bitcoin price, August 2019
Bitcoin price, August 2019

The above recent pattern looks a bit like mid May where there was a drop, then another attempt to rise, followed by another drop which turned out to be a cup and handle.

That may be because at resistance levels traders are probably taking profits, with $14,000 being a clear resistance line.

In the meantime, if it rises, then the bull pressure builds up, with one reason for it perhaps being China’s Yuan (CNY) which has dropped against the dollar.

USD/CNY, August 2019
USD/CNY, August 2019

Trump has imposed a 10% import tax on $300 billion worth of Chinese goods, adding to the previous 25% tariffs on an additional $250 billion.

Meaning all Chinese goods are now being taxed, with China in turn taxing all US goods, some $120 billion, with a 25% import tax.

What this will do to trade between the two countries and perhaps relations, remains to be seen, but the result for CNY has been a clear jump in one of the biggest green candle since May.

CNY is nearing 7 to the dollar, with it appearing to have escaped the sideways to now maybe form a new trend.

That can have an effect on bitcoin if markets anticipate a further devaluation of Chinese money as residents there might scramble to preserve some value through bitcoin.

In anticipation of such scramble, others might front-run, with it unclear now whether Trump will widen the tariffs agenda particularly to Europe.

The latter might have more leverage than China because they tend to consume US goods, particularly tech services like social media.

A trade war with Europe, therefore, could damage America both economically and otherwise while potentially strengthening the European economy especially where digital services are concerned.

So it’s not clear whether Trump would want to potentially get bruised while sort of in a campaign mode with the US elections now not that far away.

Nor is it clear whether these tariffs are working, with them seemingly bringing little revenue so far and with the recent growth seemingly being more due to debt fueled tax cuts that transfer explicit and progressive taxation to very regressive taxation through inflationary monetary supply.

Then there’s crashing pound due to potentially no deal brexit, with the global monetary picture appearing to be quite favorable for further bitcoin growth.

Copyrights Trustnodes.com

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