Uncertainty across global financial markets and a weakening of the United States dollar are contributing to a Bitcoin bullish rally. In addition to a weak US dollar, other currencies are also losing ground: the Japanese yen (2.6% weaker against U.S. dollar this year), the Russian ruble (2.3% weaker against U.S. dollar) and the Euro (3.8% weaker against U.S. dollar).
While the greenback continues to be the leading international fiat currency, there is no question that Bitcoin is still the king of cryptocurrencies. Bitcoin price has been steadily climbing over the past few months; after a few weeks dancing around the highly psychological $10K price level, the final week of July has been crucial. Not only has Bitcoin surpassed $10K but also approached $11,000 with a solid trading volume that makes technical analysts believe there is plenty of room to head towards $12K.
Bitcoin bulls have been pushing the exchange price up as a means to get the market involved and make it less bearish. Bitcoin price may continue to go up as the market welcomes institutional investors as well as traders who are highly doubtful of Wall Street activity in the midst of the coronavirus pandemic. The American economy has been deeply affected by COVID-19 and the inability of the Trump administration to bring it under control, but equity securities continue to trade as if a working vaccine is just around the corner. Even as epidemiologists warn that it is more important to formulate a backup plan in case a vaccine is not ready before November, Wall Street seems to be shrugging things off.
Another financial factor that is certainly helping Bitcoin is that the gold market is reacting as it should. Gold is the ultimate flight-to-safety investment asset, and it is finally starting to prove its status despite having crashed along with Wall Street earlier this year. It is important to remember that Bitcoin also joined gold, oil, and Wall Street when all three crashed in March, but we are now starting to see a clear separation. The more investors doubt Wall Street, the more they will be interested in the cryptocurrency markets.