Bitcoin (BTC) is about to enter overbought territory on the daily time frame but there is still room for an aggressive rally to the upside short term. As frequently mentioned in our previous analyses, Bitcoin (BTC) will have to retest previous market structure sooner or later. This is the best time to do that considering Bitcoin (BTC) is close to topping out short term but there is room for a rally towards $6,000. This is speaking about Bitcoin (BTC) independently but as we have seen in the past, Bitcoin (BTC) looks up to bigger markets at critical points. If EUR/USD had started a recovery instead of continuing to decline around July, 2018, we would have seen Bitcoin (BTC) do the same.
Just as the EURO showed signs of a false recovery before the fall towards its true bottom, BTC/USD also gave investors false hope around July, 2018. This is because Bitcoin (BTC) is paired to the US Dollar (USD) on most exchanges across the globe. If EUR/USD goes up, this means that the Dollar (USD) goes down and when the Dollar (USD) goes down, the price of Bitcoin (BTC) goes up. The exact same thing is happening today. The positive movement in the price of Bitcoin (BTC) and other cryptocurrencies we have seen over the past 24 hours has more to do with EUR/USD than the cryptocurrency market. If we look at the BTC/USD chart, we see a yearlong bear market which if followed by patterns of the past should see Bitcoin (BTC) trading sideways for a long time before any hopes of a recovery.
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