By Lukman Otunuga, Research Analyst at FXTM
Bitcoin bulls shifted into higher gear over the weekend, as prices surged above $7,550, levels not seen since August 2018.
With no major news factors behind the aggressive appreciation, the sharp $1000 jump over the weekend remains a mystery to investors. Although such explosive moves are nothing new in the volatile world of cryptocurrency, there is the coincidental view that the rally in Bitcoin has come around the same time as heightened US-China trade tensions have eroded risk sentiment.
Source: Bloomberg Terminal
While it’s far too premature to suggest that Bitcoin has restored itself as a potential safe-haven asset for investors, the idea will attempt to pick up further momentum if the cryptocurrency continues to explode higher amid the risk-off conditions.
There is a likelihood that Bitcoin bulls are finding inspiration to jump into the market on the headlines of a rally in Bitcoin. The bullish ‘golden cross’ is already in play on the daily charts. This occurs when the 50-day simple moving average has crossed above the 200-day moving average. With prices punching above $7,400 and currently trading around $7,000, bulls remain in the driving seat. A solid weekly close above $7,400 may open the gates towards $8,000 in the short to medium-term.
Uber shares tumble on debut
Uber shares have stumbled into the trading week, struggling to shake off the hangover from the company’s rough and rocky debut on the New York Stock Exchange last Friday.
Its shares closed nearly 8% down last week thanks to investor skepticism over the company’s unprofitability and general lack of risk appetite amid escalating US-China trade tensions.
The launch of Uber on the stock market was one of the most highly anticipated additions since Facebook shares many years ago, but it is a surprise to see how unsuccessful the launch has been given the widespread popularity of the Uber brand globally.
Overall, it does appear that risk aversion will remain the name of the game for financial markets further into the trading week as trade tensions, geopolitical risk factors and repeated concerns over global growth diminish risk appetite. Uber shares, like many other financial asset classes, are set to stay under a negative spotlight as investors instead favor safe-haven assets.
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