Bitcoin (BTC) Is Waiting On EUR/USD For Its Next Big Move

Bitcoin (BTC) Is Waiting On EUR/USD For Its Next Big Move

Bitcoin (BTC) made a big move to the upside after yesterday’s close that gave investors the false idea that the price had broken out of the symmetrical triangle and the descending channel both. However, it was nothing more than a fake out as the price fell back inside the descending channel erasing most of its gains. The bulls and bears are heavily divided here because this a major turning point. If the price goes up from here, the bearish resolve will be seriously weakened. On the other hand, if the price falls down from here that will be game over for the bulls as it would confirm the bear trend on larger time frames. The 4H chart for BTC/USD shows that the price remains in a descending channel and the RSI remains in a strong downtrend.

There is an acute lack of bullish momentum to push the price past the descending channel. The market makers are just looking for retail bulls to keep buying the dips but at some point the retail bulls are going to get tired and the market makers would then have to ‘help’ the price on its way down so as not to let shorts stack up. This is an excellent bearish setup but as always traders would be better off to avoid and wait and see approach to see which way the price swings. There is a successful rule in investing and it is called the Rothschild 80-20 rule. It states that you can take 20% of the move at the top and bottom and I’ll take everything in between. This is a rule that most successful traders follow. They don’t enter a position wishing and praying the price would swing a particular way.

Bitcoin (BTC)’s next big move hinges on what happens in EUR/USD. If the Euro takes a swing to the downside as we expect it to, then Bitcoin (BTC) will fall below $10,000. On the other hand, if EUR/USD swings to the upside which is still possible but not very probable, we may see Bitcoin (BTC) rise. If we take a look at the daily chart for EUR/USD, we can see that it is in a clear downtrend. The RSI has now run into resistance signaling that the price might be primed for a sharp decline from here.

It is important to note that the price of Bitcoin (BTC) is affected by movements in major markets particularly that in the S&P 500 (SPX), Gold and the EUR/USD forex pair. The Euro has been stalling a decline against the US Dollar for months now. We might finally see this decline come into effect if the US-China trade war escalates further or any similar development that leads to a strengthening dollar. The Fed is also concerned about the effect of its policies on the global economy but this move to the downside is very likely to come to fruition sooner or later. All the Fed or ECB can do now is stall this decline but it is likely to come into effect eventually and when that happens, Bitcoin (BTC) and the rest of the cryptocurrency market will take a devastating hit.

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