The cryptocurrency market is shaking off its recent slump as volume and prices surge across all the major assets. The market caps of Bitcoin, Ethereum, and many of all the altcoins are all up by single-digits today, and this is part of a growing trend that may develop into a powerful long-term rally. The bullish momentum may be driven by geopolitical factors and technical indicators.
The geopolitical landscape is rife with uncertainty. On the economic front, China and the United States may enter a trade war as U.S president Donald Trump seeks to protect his country from unfair trade practices through a system of tariffs and renegotiated treaties. The Chinese are responding with similar measures as well as taking steps to purchase crude oil imports in yuan instead of U.S dollars – a move that could harm the U.S currency.
On top of the economic situation, the situation in Syria is escalating as the United States, U.K, and France launch a missile strike on the Assad regime ostensibly over a chemical attack. The current Syrian regime is allied with Russia, and many fear that tension in the region may develop into a wider geopolitical conflict.
Cryptocurrency as a Safe Haven Asset
Cryptocurrency has historically functioned as a safe haven asset because of its independence from governments and central banks as well as its low correlation with other financial markets. Thus, the increasing geopolitical tension is a powerful bullish factor in the cryptocurrency market. On top of this, the market’s technical setup is also favorable.
Most of the major coins have broken out of their bearish patterns and are set up for a powerful long-term rally. Bitcoin, Ethereum, and Ripple are up 4%, 6%, and 7% respectively, and the total cryptocurrency market cap has risen to $333 billion with Bitcoin dominance at 42%.
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