BTC to GBP is Nearing Our Price Target and £7000 Mark
Last week, we mentioned that the BTC to GBP exchange rate had formed an inverse head and shoulders pattern with a price target of $6974.20. Today, the price is nearing that level after a near-perfect breakout. The Bitcoin priced in GBP triggered the inverse head and shoulders pattern on the evening of the day we published our outlook. The price traded as high as $6484, just to test the same breakout point level of$ 5893.65 a few days later, and then resume its upward trend.
At the time, worries about a war between the US and Iran was the trigger that caused the markets to trade higher. But as it appears right now, the trend in the market is getting reinforced by investors that felt that they are getting left behind and that want to position themselves for a major move in the months ahead. It becomes a self-reinforcing cycle, where high prices feed higher prices.
In 2019, we saw a similar pattern, in February 2019, BTC to GBP price bottomed out from the $2549 level, and reach a high of $10975 a few months later. Ultimately, the price slid to a low of £4940, a level that was reached last month. It now looks like the pattern is repeating itself.
However, there is some news hitting the wires that are boosting confidence. This week, Visa said they would buy crypto-serving fin-tech unicorn, Plaid, for $5.3 billion. Plaid helps users connect bank accounts with apps, however, they also help crypto companies such as Coinbase. Options trading on Bitcoin is also since available yesterday on the CME.
The price remains undoubtedly bullish for now, and the next price target is the inverse head and shoulders pattern target at $6974.20. The price is also short-term overbought so traders looking for a better risk-reward ratio will probably treat the January 10 low at $5876 as the trend defining level, and wait for a correction to the $5876 – $6400 interval before adding to their positions.