Bitcoin prices surged $20 or 3.25 percent today after the PBOC devalued the Yuan at the lowest level in over 5 years. The move higher was followed by Litecoin albeit at a smaller pace of 1.3 percent. As usual, we’ll start with the big brother and move back to LTC later in the article.
Bitcoin Surges 3 Percent
Bitcoin prices rallied 3.25 percent in the early Asian session after the People’s Bank of China moved the USD/CNY fixing to 6.7098 from yesterday’s price of 6.7008. Today the offshore Yuan (USD/CNH) is surging even higher, trading above the onshore rate at 6.7284.
Almost all Bitcoin mining and the majority of trading volume is generated in China. The Yuan exchange rate can have a sizable impact on Bitcoin prices (at least in the short-term) as these traders/miners rush in to hedge their weakening currency. It’s also speculated that Bitcoin is partially used as a means to circumvent China’s currency controls. It’s up for debate how prevalent this is and what impact it may have on BTC prices.
With that out of the way, let’s take a look at the technical picture. Today Bitcoin has had a decisive break above the $614 resistance. This puts us in a rally mode. We’ve also taken out another resistance, the two-month high at $628.25. Bitcoin is now quoted at $634.70 per coin.
Read More https://blog.fxopen.com/bitcoin-surges-on-weaker-yuan/
