Bitcoin Falls as Yuan Strengthens
Bitcoin has been falling slightly, dropping this week from $9,000 to $8,600 and down from last month’s $10,000.
Why it has turned somewhat downwards since the 24th of June when it reached $14,000 is not too clear, but it may be just profit taking after a very fast rise during spring and summer:As it stands, the chart is a bart, back to the circa $8,500 support level where it saw the biggest recent green candle upwards, and red candle downwards.
Where it goes next is anyone’s guess, but besides mere speculation, the rise and fall might also be due to Yuan’s fall and now slight rise: What we have here is bitcoin and CNY moving in tandem during spring and summer. CNY then falls further, with USD’s value against it up and up, but bitcoin doesn’t follow presumably because it had already risen and gone too far or who knows why. Now for this month CNY has strengthened a bit, with bitcoin so falling somewhat, but China’s economy is weakening and considerably.China’s growth has been falling, but more importantly, its inflation is rising significantly.
The big jump in October stands out, but even more stands out its rise from the beginning of the year at 1.5% to now 3.8%. That means real growth in China is at just 2.2%, far lower than the 5% plus they’re used to. Part of that is because arguably they’ve devalued too much, but also perhaps because the low hanging fruits have been caught already, so there might not be too much more room for productivity to increase the economy. There’s also the tariffs, with a trade deal apparently nearing an agreement , but China might be falling to the same trap as Japan before them and the west now, the trap of monetization.
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