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EUR/USD And Bitcoin (BTC) Share Similar Outlook After Dovish Fed Tone
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EUR/USD And Bitcoin (BTC) Share Similar Outlook After Dovish Fed Tone

EUR/USD bulls claimed victory when the price rose above 1.140. In addition to that, Morgan Stanley said that the Dollar’s bull run had ended. On top of all of that, a dovish fed tone led to an understanding among traders and investors that the Dollar might indeed be due for a long decline against the Euro in the months ahead. The above monthly chart for EUR/USD is what we have been emphasizing on when the first signs of a similarity between 2004 to 2006 and 2018 started to appear. If you look at the encircled price action during both of these periods, it is hard to miss the striking similarities. While this does hint that EUR/USD may follow a similar rally this time, it also shares a strong similarity with Bitcoin (BTC).

The similarity that the EUR/USD chart shares with Bitcoin (BTC) is that not only do they share the same outlook; they also share the same price action. It is pretty straightforward to see how Bitcoin (BTC) performed when the EUR/USD tumbled, so let us not get into that. Instead, let us focus on the pattern inside the two circles. If we look at the first circle between 2004 and 2006, we can see the price following five waves of up and down movement. If we compare the two circles, we can clearly see what is going to follow next. EUR/USD has just completed the fourth wave this time and is expected to complete the fifth wave in early 2019. This alone would be a strong reason to assume that Bitcoin (BTC) is going to rise because the USD is going to fall.

However, we are talking about more than the obvious direct relation between EUR/USD and Bitcoin (BTC). We are comparing how EUR/USD is doing the same thing as Bitcoin (BTC). EUR/USD has ended up printing the same pattern that it did between 2004 and 2006, except this time it has done it in a one year’s time instead of two. Do you know what else has completed a previous pattern in half the time as before? Bitcoin (BTC)! Just as the EUR/USD converged while trading in the current circle, Bitcoin (BTC) has also converged. You will notice both in the case of EUR/USD and Bitcoin (BTC) that not only do the fractals look alike, but the waves completed during the previous cycle are also the same as the waves completed during the current cycle.

Bitcoin (BTC) shares the same outlook as EUR/USD because both are going to complete a previously formed pattern in half the time as before. Furthermore, the rise of both directly depends on the fall of the US Dollar (USD). If we look at the BTC/USD monthly chart, we can clearly see that Bitcoin (BTC) has completed one full cycle between 2014 and 2018 i.e. a period of four years. The next cycle is going to be completed in a period of two years i.e. between 2018 and 2020. For the sake of simplicity, if we divide the pervious cycle in half, we can see that 2014 to 2016 is the bearish period and 2016 to 2018 is the bullish period. If we look at the current cycle, 2018 to 2019 can be considered the bearish period, which means that 2019 to 2020 will be the bullish period.

 

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Fakhan

I work as the key Trading Analyst for Crypto Daily and provide the team with regular analyses and updates regarding the technical performance of all cryptocurrencies on the market. I am responsible for the production of articles and posts for Crypto Daily’s own technical analysis section and spend my time monitoring and commenting on the varied moves the markets make on a daily basis.

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