Bitcoin (BTC) has recently surged by around 6% from ~6,850 to ~7,475 after a small price drop to the $6,850 region. At the same time, the price increase is also surprisingly close to the time in which the United States killed Qassem Soleimani, the head of Iran’s Quds Force. Some technical traders consider that the attack is not related to the recent performance experienced by Bitcoin’s price.
Bitcoin Surges – Which Are The Reasons?
Bitcoin has been traded stably during the last months between ~$6,700 to ~$7,500, however, the last hours were marked by increased volatility in the market. Yesterday afternoon, Bitcoin fell below $7,000 once again, as it did a few times during the last months. Nonetheless, the price of the most popular cryptocurrency surged by over 9% in the last hours.
Although many have considered the U.S. attack on Qassem Soleimani and the Iranian reaction the main cause of Bitcoin price increase, technical traders predicted a bounce the night before. This could completely shut down the theory that traders are currently stocking Bitcoin to hedge against financial instability or in case of a war.
The Twitter user Teklordz released a tweet in which he showed an ascending channel in which Bitcoin’s price was moving. At night, when the price fell below $7,000 it has also dropped below the lower band of the trend. This is why he wrote that he was thinking to buy BTC.
A few hours later, he posted an update with Bitcoin growing to the upper half of the ascending channel.
— teklordz (@teklordz) January 3, 2020
This shows that sometimes, the market is moving across certain levels that work as support and resistance rather than following specific events and creating an appealing narrative around them. Although some users could have purchased Bitcoin due to the current situation between Iran and the United States, it is highly unlikely that it has been the catalyst for this price action.
However, if we have a look at the charts shown by Teklordz, it is possible to see that it is highly possible traders were waiting for Bitcoin to test the lower band of the channel. This not only happened but it also propelled Bitcoin to around $7,500 per coin.
At the time of writing, the leading cryptocurrency has a market capitalization of around $133.63 billion.