Bitcoin has rallied 8.7 percent in January, nearly three times the gain for gold, which hit a six-year high of $1,587 an ounce on Monday.
Some prominent analysts say both bitcoin and gold have gotten a boost as investors sought save-haven assets amid escalating tensions between the U.S. and Iran.
Bitcoin skeptic Peter Schiff agrees that heightened geopolitical tensions have pushed both gold and bitcoin higher.
He says the safe-haven rally in gold is the result of investors buying the yellow metal as a hedge against rising risk.
Bitcoin's price gain, by contrast, is due to speculators betting that some investors will see the cryptocurrency as a safe haven, Schiff says.
Both gold and oil picked up a strong bid immediately after the news of the U.S. killing of a top Iranian commander hit the wires at 01:00 UTC on Friday. Bitcoin stayed below $7,000 for hours after the news and only began rising at 04:00 UTC.
Bitcoin's delayed response could be telling a tale of hopium – speculators betting that investors will buy the cryptocurrency as a safe haven. So one could argue that the rise from $6,850 to $8,000 could be reversed if the expected safe-haven flows remain elusive.
Gold has pulled back from Monday's high to $1,565 an ounce, as global investors shrugged off the Iranian risks.
At press time, however, bitcoin is showing little sign of weakness, holding strong near $7,900.
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Breakout Confirmed
BTC: Price: $7,870 | Market cap: $143.60 billion | 24-Hr Volume: $24.98 billion
Short-term trend: Bullish
Bitcoin jumped more than 5 percent Monday, confirming an inverse head-and-shoulders breakout on the daily chart.
The pattern represents a successful transition from a bearish "lower-highs, lower-lows" setup to the bullish "higher lows, higher highs."
The breakout has opened the doors for a rally above $8,700. Supporting the bullish case are the ascending 5- and 10-day averages and an above-60 reading on the relative strength index, the highest since October.
Overall, the odds appear stacked in favor of a convincing move above the immediate resistance of the widely-tracked 100-day average, currently located at $7,945. The cryptocurrency did rise to $8,000 during the Asian trading hours, but the break above the long-term average was short-lived.
The short-term bullish case would weaken if prices find acceptance under the former resistance-turned-support of $7,586. Long-term trend: Neutral
The inverse head-and-shoulders breakout on the daily chart has confirmed seller exhaustion signaled by a hammer candle created in the seven days to Dec. 22 and last week's doji candle.
The long-term outlook, however, would turn bullish if and when the six-month falling channel is breached to the higher side. Currently, the channel resistance is located at $8,000.
A channel breakout could happen in the next few weeks as the May 2020 mining-reward halving approaches.
Though traders and analysts are divided on whether the halving's impact is already priced in, buying pressure could emerge ahead of the much-anticipated event.
Further, if the U.S.-Iran tensions escalate, sending gold to fresh multi-year highs, bitcoin may attract stronger haven bids.
Read Analysis
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XRP Soaring High XRP: Price: $0.21 | MCAP: $9.3 billion | 24-Hr Volume: $426.2 million
Short-term trend: Bullish
XRP is one of today's best performing crypto assets in the top 100 by market capitalization, based on data from Messari.
On Jan. 6, Binance announced the launch of its XRP/USDT perpetual contract, and prices rose more than 15 percent over a 24-hour period, on strong volume.
Prices have now climbed above former resistance at $0.2136, which could now become a new level of support - potentially a sign of a bullish market reversal.
XRP is a cryptocurrency that aims to increase the speed and reduce the cost of transferring money between financial institutions.
Long-term trend: Neutral
Prices will need to rise firmly above the new resistance level of $0.2343 before confirming major changes to the long-term trend.
While the daily RSI is trending bullish above 50, the awesome oscillator, an indicator of trading momentum, is yet to cross the neutral 0 mark, representing a significant trend change from bearish-to-bullish.
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| | | Disclaimer: The information presented in this message is intended as a news item that provides a brief summary of various events and developments that affect, or that might in the future affect, the value of one or more of the cryptocurrencies described above. The information contained in this message, and any information liked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments. |
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