Bitcoin: price rising again thanks to Trump’s statements

Over the weekend the price of Bitcoin recorded a slight rebound.

It is very likely that this rebound was triggered by some statements by Trump regarding the evolution of the situation in Iran. 

To tell the truth, for now the rebound is so tiny as to still be almost irrelevant, but it is possible that it will continue during the day, or perhaps even in the coming days, to the point that it may eventually become significant. 

Bitcoin’s small price rebound

Starting from May 11 the price of Bitcoin had begun to fall. 

In just under two weeks it fell from more than $82,000 to just over $74,000, also due to the evolution of the macro situation. 

In particular, geopolitical issues related to the war in Iran weighed on it, with for example the price of WTI oil rising from less than $90 per barrel to more than $109.

However, starting last Thursday the price of oil began to fall, so much so that today it has fallen back below $95.

This recent rise in the price of oil in past weeks had preceded the drop in the price of Bitcoin by a few days, and perhaps the recent drop in the price of oil may also have preceded by a few days the rise in the price of Bitcoin. 

In fact, already on Saturday, with the stock exchanges closed, BTC briefly went back above $77,000, and between yesterday and today the rise above this psychological threshold has consolidated.

Trump’s statements

The underlying problem is still the closure of the Strait of Hormuz, which is generating a reduction in the supply of oil with a consequent increase in its price.

At the beginning of May it was thought that the strait could reopen, but later there was a new cold shower due to the fact that the peace talks between the US and Iran were not leading to any concrete agreement. 

Yesterday, however, Donald Trump wrote on Truth that the negotiations are proceeding in an orderly and constructive manner. He also wrote that the blockade of the Strait of Hormuz will remain fully in force until an agreement is reached and signed, but since on Saturday he had stated that the agreement was already “largely negotiated”, with the reopening of the Strait of Hormuz as a key element, the markets reacted well. 

The reaction of the markets

Yesterday and the day before yesterday the stock exchanges were closed, but the crypto markets as usual were open.

And so already on Saturday Bitcoin’s small rebound began, and in fact it continued yesterday while waiting for the reopening of the traditional stock exchanges. 

Today the price of oil opened with an initial -5%, following the -7% of the previous three trading sessions. 

The two reactions actually go hand in hand, although in opposite directions, with the difference that Bitcoin’s reaction came first. 

It should be noted that the trend of Bitcoin’s price is actually within an ascending channel since March 30, when it was worth less than $66,000. Only the minimum peak reached between Friday and Saturday was recorded below the lower line of the ascending channel, but that was probably a real anomaly. 

The Bitcoin anomaly

Until last Wednesday, May 20, the short-term trend of Bitcoin’s price was following a curve similar to that of other growth assets. 

That day, however, there was a relatively significant rebound in the average prices of growth assets, while Bitcoin’s price rebound was minimal. 

Indeed, the following day the rebound of growth assets continued, while that of Bitcoin stopped, so that on Friday an evident anomaly emerged: while the rebound of growth assets recorded the last small rise of the week, the price of Bitcoin fell by 2.7%.

This was in all respects an anomaly that does not seem to have justifications deriving from fundamental analysis. It was probably just a sort of inevitable technical move due to the fact that many whales wanted, or had, to close many positions before ending work for the weekend. 

Today this anomaly could start to be reabsorbed, although it will be necessary to wait until the afternoon to get an idea of the direction that the average prices of growth assets on the US stock exchanges will take today. 

The small rebound of Bitcoin yesterday and today could also be the resolution of this anomaly, so much so that several whales last night already reopened new positions (generally short-term long positions) on BTC after the reopening of the Asian stock exchanges. 

When the US stock exchanges reopen there will be a clearer idea of the validity of this hypothesis, and if it should prove to be correct, in theory one could expect the rebound to continue.