The Euro is in a tough spot against the US Dollar and as we can see on the daily chart for EUR/USD, there is a lot of room for potential further downside. If the pair was to close below the 38.2% fib retracement level today, then we would be looking at a decline to the bottom of the channel. If you look at this chart and put it next to the BTC/USD chart, you would notice that movements in this pair have had a very strong impact on the price of Bitcoin (BTC) throughout Bitcoin (BTC)’s trading history. The effect has become more pronounced with an increase in USD trading volume. Since Bitcoin (BTC) is traded mostly in US Dollars on most exchanges, a rise or fall in EUR/USD has a direct impact on the price of Bitcoin (BTC).
When the pair started to show signs of weakness and began its downtrend in early 2018, we saw BTC/USD do the same and even throughout the bear market we saw EUR/USD strongly affecting the price of Bitcoin (BTC). The next downtrend from here will be very devastating for the pair but it is going to be even more devastating for Bitcoin (BTC) especially as it is at a very vulnerable point and a decline from current levels would pave the way for the next downtrend that I expect Bitcoin (BTC) to begin soon because I think we are still in a bear market and Bitcoin (BTC) is about to enter the second half of it. There is a long road ahead before Bitcoin (BTC) bottoms and this correction comes to completion. This is why I don’t think it is a good idea to be catching the knife by buying dips.
The daily chart for BTC/USD better explains what is going on. The price has failed to break past the 200 day EMA. There have been some desperate attempts to push the price up recently but they have been inconsequential for the most part. Meanwhile, we have a class action law suit against Tether and Bitfinex for alleged market manipulation. These are the same lawyers that successfully sued Craig Wright. This case has very sharp teeth and it could hurt BTC/USD a lot short term in terms of price but long term it would help reduce manipulation in the market.
Manipulation in any market is nothing to be happy about. Today you might be happy that Tether pumps have led to price pumps in Bitcoin (BTC) but when the manipulators turn to the other side and start preying on the bulls, it would be a different story. There are cycles in every market and it is reasonable to think that we would have bullish and bearish times but during those times it is important not to have such naked manipulation that would discourage serious investors from entering this space and joining the cryptocurrency and blockchain revolution. In light of the bearish outlook of EUR/USD, things don’t look good for Bitcoin (BTC) short term but we might see a relief rally after the ongoing correction comes to completion.