Bitcoin Jumps as Investors Move to Safe-Haven Assets

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Bitcoin on Friday opened in positive territory, marking its biggest daily gain in the past two weeks.

The benchmark cryptocurrency surged by as much as 7.04 percent to establish a session high of $7,401. The upside move followed a starkly depressive action late yesterday, wherein the price fell as low as $6,854.67 (data from Coinbase).

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Global demand for safe-havens helped bitcoin escape a strong bearish zone | Source:, Coinbase

However, a macroeconomic narrative took hold of the global market’s bias, which helped bitcoin rebounding from what appeared like a strong interim bearish bias. The US on late Thursday night killed Iran’s top military official Qassem Soleimani in a drone strike. The event reignited tensions in the Middle East and raised probabilities of a full-blown military conflict between the US and Iran.

Investors took cues from the escalating geopolitical crisis and started taking refuge in safe-haven assets. As a result, global benchmark Brent Crude surged by 4 percent to retest its fourth-month high. Gold also registered a three-month high after jumping more than 1.50 percent.

Bitcoin Lagged

Bitcoin didn’t react immediately to the news of the US drone offensive. Instead, the cryptocurrency took its cue from the jumps in safe-haven assets. Its Friday gain thereby lagged that of mainstream havens by 4-5 hours.

Nevertheless, social media quickly linked the bitcoin price rise as a direct result of the escalating US-Iran military conflict. The storm calmed down when certain influencers publicly rubbished the correlation between the two events.

Peter Schiff of Euro Pacific Capital, for instance, noted that speculators drove the bitcoin prices higher, not institutional investors. Excerpt from his statement:

Heightened geopolitical risk has resulted in both gold and Bitcoin moving higher, but for different reasons. Gold is being bought by investors as a safe haven. Bitcoin is being bought by speculators betting that investors will buy it as a safe haven.

A Technical Correction

Market analyst CryptoISO claimed that the latest upside move followed a massive Short Squeeze in the retail markets.

Traders who had betted that bitcoin would fall started exiting their short positions hours after mainstream haven assets recorded fresh highs. The speculation alone protected the cryptocurrency from falling into a deep bearish pit – and the price rebounded.


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