Contact

Bitcoin in safe-haven mode

jeffriess
January 28, 2020
by Joseph Jeffriess, Market Analyst

Bitcoin rallies alongside traditional safe-havens during Monday’s coronavirus selloff.

Looking at the action from Friday to tonight, we can clearly see the shift on Friday/Monday from risk back into safe-havens as uncertainty built in the markets. Equity markets and risk currencies like the AUD fell heavily, selling really accelerating on Monday and into this morning. We expect traditional safe-havens like the Japanese Yen, USD and Gold to rise as traders look for hedges or safe assets to move into.

A new addition has started to move into this class. This is not the first time we’ve seen this happen. Bitcoin was also seen to rally as equities fell during stages of the US-China trade dispute. Friday till Today we can see some clear evidence (or coincidence) that traders are now also using Bitcoin as an asset to move into when risk is being sold due to uncertainty.

Looking at Bitcoin we can see buying started on Friday and really accelerated on Monday at the peak of the risk asset selling. Bitcoin jumped by 6.73% over the two sessions and added a further 2.16% to today’s high. As risk has started to settle down tonight bitcoin has also seen selling. Price has hit new Jan highs today, what’s next will we see the current uptrend stall if favour returns to risk markets? Or will fresh negative developments sounding coronavirus maintain the demand currently being seen?

All times are AEST.