Bitcoin prices are beginning to gain traction once again as President Trump added uncertainty the capital markets generating interest in a safe haven currency such as bitcoin. Prices are higher for the 3rd consecutive trading session and are poised to test higher levels. Momentum is also on the move which means that are trend is on the process of forming. The impetus appears to be a tweet from Donald Trump regarding new tariffs on Chinese goods. China’s foreign ministry pushed back against President Donald Trump’s latest tariff threat on Friday, reportedly saying the world’s largest economy should give up its illusions, shoulder some responsibility and come back to the right track on resolving the trade war.
China Fights Back After Trump Tweet
Out of the blue, President Donald Trump added volatility back into the capital markets by tweeting that he plans on adding another 10% tariff on 300-billion of Chinese goods come September 1, if a deal between the US and China was not consummated. China’s spokesperson at the foreign ministry, Hua Chunying, said at a daily press briefing that Beijing would have to take countermeasures if the US was committed to putting more tariffs on Chinese goods. She added that while China did not want a trade war with the U.S., it was not afraid of fighting one.
Trump Keeps the Tariff War Going
In a series of tweets on Thursday, Trump announced another round of tariffs on the roughly $300 billion of Chinese goods that had not already been targeted by American levies. The charge will take effect from September 1. While the President said he could have made these tariffs 25%, he decided to start with 10%. The move breaks a truce in the long-running trade war between Washington and Beijing, with investors fearful it could further disrupt global supply chains. Just last month the President said that the two countries were now at a truce and attempting to work out an agreement. For Trump the timing is not as fast as he would like it and he fears that the Chinese government is trying to run out the clock.
US Downturn is commencing
While the US jobs markets remains solid, manufacturing is beginning to slow. The US July ISM national index showed a decline to 51, the lowest the index has been since 2016. This number has dropped significantly and is poised to drop below the 50-expantion contraction level. The decline in US manufacturing is a function of the trade dispute and will eventually spill over into US growth.
Momentum on Bitcoin has Turned Positive
The volatility in the market place is allowing bitcoin to gain traction, and increasing the need to trade crypto. Momentum on the cryptocurrency has turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line. The MACD histogram is printing in the black with an upward sloping trajectory which points to higher prices.