The past two weeks have been good for bitcoin. Thanks to various factors the price has been keeping its head above the $260 mark and fluctuating in the $270s until today. Today the price has broken the $280 ceiling to reach over $281.
The considerably stable bitcoin price combined with the not so significant improvement in the world economy over the week has led to increased trading activity. On Thursday Huobi, the largest Chinese bitcoin trading platform reached a record trading volume of over 770000 bitcoins, states the exchange in an interview on CoinTelegraph. Bitcoin exchanges are reporting an increased number of users on their platforms as well. The increased trading, especially in China comes around the time the Chinese government has further cut its interest rate by 0.25 percentage points. The rate cut is fueled by weakening of the economy with the country’s economic growth hitting a 6 year low of 6.9%. (As reported by The Guardian).
Meanwhile the other economic driving force, United States has its economy ranked at D+ at the moment (according to CNBC’s analysis). The outlook remains at an 18 month low among the people, however the dollar is showing signs of a slow recovery. With the US economy being considered as one of the key drivers of the global economy, loss of confidence in USD will drive investors to alternate commodities like bitcoin which incidentally happens to be the best performing commodity at the moment.
While this trend may continue for some more time, the fate of the Chinese economy will depend upon the reaction of the people to the Chinese Communist Party Meeting that is scheduled to be held on the 26th of this month to present and discuss a 5 year plan for the economy (CNN Money report). The main purpose of this meeting is to assure the world about Chinese economic stability and growth potential in the near future. Currently China is being the biggest driving force behind the strong bitcoin price and will continue to be as long the investment spree among the Chinese continues.
However, with China cutting interest rates, the European Stock Market has gotten strong and a further trend will strengthen the European Market. It may have a small impact on the bitcoin price trend. As we have earlier mentioned, bitcoin price has a pretty good chance of reaching the $300 mark and provided the trading spree on Chinese exchanges continues.