Bitcoin was sold off over the weekend and lost ground against major currencies. This selloff sent the BTC to GBP pair below the £7300 mark as at the time of writing. This latest selloff has dampened the mood of traders who thought that finally, they were going to see some of the monumental price moves of 2017.
However, last week’s rally in the BTC to GBP pair as well as in other Bitcoin pairs was induced by safe-haven demand and not really by any innate fundamentals in Bitcoin. What the markets are seeing is no more of capital preservation, which tends to lead to investment money pouring into gold, silver, the US Dollar, Swiss Franc and the Japanese Yen. While those are still occurring, investors want to see more returns on their investments during the risk-off market periods and Bitcoin (along with other major cryptos) seem to be the perfect vehicles to drive this.
Now that the Chinese government is reporting figures that indicate a slowing of the spread of the coronavirus within China, money is gradually leaving the crypto market and back into the risky assets. The dream of a “£100,000 Bitcoin” remains a dream, at least for now.
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Technical Outlook for BTC to GBP Pair
My mantra is to trade what the charts give you and not to rely on wild predictions from self=proclaimed gurus. Right now, the BTC to GBP chart shows that price broke above the large descending channel, but saw the upside move capped by a gradual return of risk sentiment in the global markets. As a result, price on the BTCGBP pair is gradually inching lower within a smaller ascending channel. The price levels defined by the Fibonacci retracement points, derived from the trace of the swing high of November 2017 to the swing low of December 2018, continue to guide support and resistance.
A breakdown of the ascending channel has to also break the 38.2% Fibonacci retracement level at £7066.65 for the downtrend to resume. This move would open the door for the price to target the 20 May/3 June 2019 lows at £5919. A short-term target of £6261 exists (20 Jan lows) and must be taken out before £5919 is actualized.
On the flip side, a bounce on the intersection between 7066 and the ascending channel’s lower border could provide the jump towards the 21 Oct 2019/10 Feb 2020 highs at 8151.64. The 50% retracement mark at 8592.77 remains a target for those bullish on the BTC to GBP pair in the short-term.
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