Bitcoin (BTC)’s recent crash left many analysts and investors clueless as to the cause of this sudden decline. However, those who realize by now that Bitcoin (BTC) does not make decisions as big as these on its own have already figured out that the recent drop has to do with EUR/USD running into a strong trend line resistance. As long as the Euro remains in a state of confusion, BTC/USD is expected to do the same. We will see some sideways movement but no definite direction until EUR/USD makes a decisive move. One might argue that Bitcoin (BTC) faced similar conditions after the previous bear market but I beg to differ. The trend line support we see for EUR/USD goes all the way back to December, 2016. On the other hand, the trend line resistance dates back to February, 2018.
The general trend according to the big picture is to the upside. EUR/USD is poised for a big rally in the grand scheme of things. However, it is hard to put a timeline on it which means investors have to be prepared for all sorts of outcomes short term. That being said, one of two things is going to happen at this time. EUR/USD has already climbed above the 21 Week EMA and if it closes the week above it, we will see a strong bullish confirmation which will tilt the balance strongly in favor of Bitcoin (BTC) bulls. The fate of Bitcoin (BTC) hinges on the future outlook of EUR/USD. If the EURO closes the week above the 21 Week EMA, we will have a strong bullish confirmation. This will very likely be followed by a break above the trend line resistance.
If that happens, the price of Bitcoin (BTC) can be expected to skyrocket in 2019. However, this is just one of the scenarios. The other scenario is EUR/USD falling below the trend line support and continuing down the descending channel. If that happens, we can expect BTC/USD to fall below $3,000 in 2019. At the moment, the probability of that happening is quite low. This is because the US Dollar (USD) is not in a position to make such moves. In the years that follow, we will see the US Dollar (USD) lose most of its influence and be reduced to just a weak national currency from its current crumbling status as a global reserve currency.
Given that EUR/USD has already climbed above the 21 Week and 21 Day EMA levels, the odds are in favor of the bulls. If EUR/USD falls below this trend line support, it is going to lead to a whole new wave of problems not just for the United States but also for the European Union. Some people are of the view that the Fed is misleading investors into being bullish on the stock market with their recently announced flexible and open approach but maybe this is exactly what they want to do because it is not just about the United States of America anymore, they have their own business to save.