Cryptocurrency markets are currently going through an interesting phase as they gain momentum after trading in a narrow range for nearly three months, Bitcoin managed to jump above the $11,000 level with gains that crossed 19% in several days to reach the highest level during 2020, amid increasing expectations for the continuation of the upward trend To reach the next support level of $12,000.
Since the end of May, the bitcoin price has been moving in the $9,000 range, and it failed several times to break the $10,000 psychological support, but over the weekend it managed to cross $10,000 to continue rising, breaking through $11,000 for the first time since last August.
Bitcoin rises in conjunction with gains in gold
In recent months, the bitcoin currency has been increasingly associated with the stock market, but at the moment this relationship has turned into a link to precious metals, however, the correlation may be short-term, which indicates that there is a similarity between the leading cryptocurrency and stock markets and metal markets, Bitcoin is similar to Stock markets are in their high volatility and are similar to gold in being a store of value and scarcity.
The increasing demand for the purchase of bitcoin by investors IQ Option It came as a result of the growing fears of escalating geopolitical tensions between the United States and China, in a sign that the Bitcoin currency is currently playing the role of a safe haven, competing with gold, which is currently witnessing record highs, as it crossed the level of 1900 dollars an ounce.
Gold has risen by 27.7% so far this year while Bitcoin has risen by 51.7% in the same period, Gold hit all-time highs yesterday while Bitcoin should nearly double in value to reach its record peak in December 2017, giving it more room to continue its rise Before concerns begin to arise about overestimating it.
But in the long run, interest in gold as a safe haven could diminish as the world becomes ever more technology-driven.
Many believe that the printing of money by global central banks to support their struggling economies from the repercussions of the Corona virus pandemic will push Bitcoin to reach the level of $ 20,000 by the end of this year.
The decline of the US dollar pushes the Bitcoin higher
Some believe that the rise in the price of the cryptocurrency above the level of $11,000 coincided with the decline of the US dollar, which is currently trading near its lowest level in two years, leaving investors with no choice but to look for profits in the riskier markets.
According to a report by Bloomberg, he noted that Goldman Sachs warned its clients that the US dollar could be in danger of losing its status as the world's reserve currency (although this seems highly unlikely in the near-to-medium future), and added that gold It is the currency of last resort especially in a tense environment like the current one where governments are devaluing their fiat currencies and pushing real interest rates to all-time lows.
With the Federal Reserve aiming to keep the interest rate near zero and continue its bond-buying program through the end of December, it appears that investors will continue to buy gold and bitcoin to protect their portfolios from inflation.
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