Bitcoin (BTC), the Euro (EURUSD), and Banks

April 15, 2019 / by Bill Noble

There are two little known macro factors working in favor of Bitcoin (BTC).

The first is the chart of the Euro vs. the dollar (EURUSD). Almost everyone has forgotten that the Euro rose vs. the dollar (Figure 1) as Bitcoin (BTC) rose in 2017 (Figure 2).

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Looking at the chart of EURUSD, we noticed that the Euro has made a six month base near the $1.1200 level (Figure 1). The weekly charts show a star candlestick pattern has formed. This could imply that the Euro is poised to rise vs. the dollar. We suspect that the Euro could rise sharply.

The only question remaining is the timing of the start of the move.

A rising Euro would equate to a falling dollar, which is very constructive for Bitcoin (BTC). Once any potential rally in EURUSD begins, we suspect Bitcoin (BTC) can begin to accelerate higher to $6,200.

There is another important macro development for Bitcoin (BTC). This one comes from the equity market. Goldman Sachs (GS) recently declined after hitting an important Fib speed resistance line. This specific Fib speed line (Figure 3) has produced the last three major tops in GS.

 class= Figure 3

While GS is a crypto friendly institution, a top in a leadership stock in the banking sector does not bode well for the sector.

For us, this sets up a trade where “long Bitcoin, short the banks” may actually come to fruition.

Bottom Line: We continue to believe that understanding Bitcoin’s (BTC) place in the macro world is key to catching the next move to $6,200. For that move to unfold, Bitcoin (BTC) will need to take its place as a leading alternative to both the dollar and the dollar-based banking system.

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