The price of Bitcoin continued Monday’s rally on Tuesday, retaking $8,000 then moving past the 200-day moving average for the first time since November last year.

The robust surge by the world’s largest cryptocurrency by market capitalisation from $7,000 to close to $8,500 has been profoundly impacted by the mounting tensions between the United States and Iran, reports Coin Telegraph. Indeed, the recent drive above $8,500 took place as the media reported Iran had attacked U.S. troops in two military bases in Iraq.

Subsequently, there was a steep rise in gold and oil prices, with the spot gold price reaching a six-year high at $1,603.21 and gold futures increasing 2% to $1,605.80. 

Furthermore, the price of crude oil rose 4%, with West Texas Intermediate crude futures rallying to $65.65 and Brent crude moving up to $71.75 per barrel. With commodities such as gold, silver and oil rallying, the Dow Jones Industrial Average futures fell by 343 points and the S&P500 and Nasdaq futures also marginally declined.

As many traders are of the opinion that Bitcoin is correlated to commodities’ price action, the cryptocurrency’s recent rally is of little surprise.  The price has rallied 15% this week, and traders will be closely monitoring to determine whether it will hold gains above the 200-day moving average.

The overall cryptocurrency market cap is now at $217.7 billion, with Bitcoin’s dominance rate rising to 69.1%. Other significant gains were seen in Litecoin, reporting a 4.73% gain, and Chainlink with 10.04%.

deVere CEO Nigel Green was quoted as saying this week: “This latest Bitcoin price increase underscores a mounting consensus that Bitcoin is becoming a flight-to-safety asset.

“Bitcoin is living up to its reputation as ‘digital gold’. Bitcoin - which shares gold’s characteristics of being a store of value and scarcity and its perceived resistance to inflation – could potentially dethrone gold in the future as the world becomes increasingly digitalised.

“The serious concerns created by geopolitical issues, such as the U.S.- Iran issue, amongst others, will likely prompt an increasing number of institutional and retail investors to diversify their portfolios and hedge against those risks by investing in crypto assets.

“This will push the price of Bitcoin higher. In turn, due to the influence of Bitcoin, other major digital currencies will receive a price boost.”