EUR/USD Bearish Outlook Hints At Bad Days For Bitcoin (BTC) Going Into Halving 

The EUR/USD forex pair ran into resistance at the 200 day moving average but the pair ended up shooting past that level in what seems to have been a liquidity hunt. It has declined back below the 200 Day MA now and risks further downside. The daily chart for EUR/USD shows how the current downtrend is a lot similar to the one that preceded it when the price made a false move above the 200 day moving average but then ended up crashing hard in the days and weeks that followed. The difference is, this time it would be falling a lot harder because the 1.2172 level was a strong resistance. 

A decline in the EUR/USD forex pair directly affects Bitcoin (BTC) because this pair contributes the most to the strength of the US Dollar. A decline in EUR/USD means a lower price of Bitcoin (BTC) in dollar terms. We have historically seen a strong correlation between the EUR/USD forex pair and Bitcoin (BTC) especially during periods of downtrend. This correlation is self-explanatory as Bitcoin (BTC) is predominantly traded in US Dollars on most exchanges. IMF Chief Economist Gita Gopinath just recently said that digital currencies are not going to threaten the dominance of the US Dollar. This is more true than ever because with all the uncertainty on the global political and economic scene, investors have been turning to the dollar. The US Dollar Currency Index (DXY) is up by 70 pts for the week. 

Bitcoin (BTC) is still half a year away from the next halving. There is a lot that could happen between now and the next halving. If we look at the weekly chart for BTC/USD, we can see that the price is very likely to be a point where it is about to see a major capitulation. The last time this happened the price tested the previously broken market structure and faced a rejection to begin a downtrend. 

We can expect the same to happen this time until the bearish setup is invalidated and the price ends up beginning a new bullish cycle. Considering that market cycles have been expanding, it would not be surprising to see the next correction continue well after halving as well. This would not be anything out of the ordinary as we saw it happened after the halving in 2016. All this hype and euphoria around halving is misplaced and is not going to end well when the Longs/Shorts ratio for Bitcoin is at an all-time high and everyone seems to be so sure that Bitcoin (BTC) will end up seeing a new all-time high.