Both Bitcoin and USD/CNH have been on a tare leading up to and around trade talks. But with both markets now pausing for breath at critical levels, traders are closely watching for their next momentous moves. It’s interesting to note that USD/CNH’s breakout has been closely tracked by Bitcoin’s melt up and how Bitcoin was gaining traction in the weeks leading up to USD/CNH’s breakout. We have seen previously that a weaker Yuan can create a ‘flight to safety’ to Bitcoin (ironically one of the most volatile assets out there) and if there is an expectation of a weaker Yuan, it can create a feedback loop between the two market. Of course, if Yuan weakens too much then capital controls could scupper the rally on both. But, for now, they’re moving in tandem and treading water beneath key resistance levels and one breakout or reversal could easily lead the other.
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