Bitcoin was trading near the 50-day moving average on Thursday and could see a breakout as fears over a No Deal Brexit still threatens the pound. Negotiations were said to be going well early in the week, but markets are now hearing that the two parties are not close to agreeing on state aid. Further tensions over a Brexit could see Bitcoin perform more strongly versus the pound than the U.S. dollar, due to safe haven flows.
Another headwind for the pound was the formal beginning of the EU’s legal challenge to Boris Johnson’s Internal Market Bill. The bill was created to alter the original agreement with the EU and has passed three readings in Parliament. Some of the loudest critics of the bill say that it breaches international law.
On the cryptocurrency front, the head of the European Central Bank Christine Lagarde said that she approved of a digital Euro that would “complement” fiat money. She also said that a digital version of the euro would provide an “alternative” to private digital currencies. Lagarde is underlining what many have said in the past, which is that central banks and governments will not hand over control of the money system to decentralized coin projects without a fight.
This could become a contentious issue in the future and could put a headwind on cryptocurrencies. In the meantime, look for Bitcoin to outperform the pound, rather than the dollar, over No Deal Brexit fears.
BTCGBP Technical Outlook
BTCGBP was trading just below the 50-day moving average and is trading within a tight range that marks previous levels of support. Bitcoin needs to break out above this range and a close above 8,500 would likely be enough. BTC could outperform other currencies as Brexit draws nearer. A No Deal Brexit could see gains in the U.S. dollar and this would BTC gains against the greenback. The Investing Cube team is currently available to assist all levels of traders with a Forex Trading Course or one-to-one coaching.