Bitcoin Reaches All-Time High Against EUR and GBP

Bitcoin Reaches All-Time High Against EUR and GBP

Bitcoin has surpassed its all-time high in two major currencies, the Euro and the British Pound, with popular British broadsheet newspaper ‘The Telegraph’ reporting on this milestone, indicating the growing awareness and interest in the cryptocurrency. While the Dollar is yet to achieve this milestone, the Euro and the Pound look to go into further decline in 2017 and this will embolden the European appetite for bitcoin.

BTCManager reported on, Monti dei Paschi, the oldest surviving bank in the world, being in the middle of a meltdown. The government proposed to raise the public debt to secure a €20 billion bailout. The Italian government pressed through with this, and it became apparent investors in the bank’s debt could face a haircut. Moreover, prioritizing Monte dei Paschi means that smaller Italian banks face the will of the market. Evidently, the Eurozone debt crisis still lingers, no longer confined to just Greece, and using public debt to finance another bank bailout is one factor that has seen sentiment toward bitcoin sweeten.

With the largest weekly volume in almost 12 months, bitcoin looks to continue to soar against the Euro. With a break of the all-time high at €872.90, there are no previous fractal levels to gauge where the market will take us next. However, the best bet is through the use of simple psychology. Buyers will look to cash out once the price has hit a psychological resistance, a big, round number where profits will be locked in and buying interest starts to fade. 

The chart below shows two possibilities. Firstly, at the €1000 mark, traders may decide to take profits, and this will exert a lower pressure on the market from bulls. Alternatively, the €1500 handle. The weekly price action below shows that buyers are in control this week and dominated last week with a €98.03 gain.

A limit sell order would be placed at €727.19 to take advantage of the possibility the market is peaking during the current weekly session. If this does not occur and XBT-EUR continues to make new highs, then we should bring the limit sell order up to the next weekly candlestick low at €756.80 and so on.

Bitcoin Reaches All-Time High Against EUR and GBP - 1
In the UK, the price of Bitcoin peaked just before the Brexit vote, with voters choosing to sever ties with the European Union. The economic implications are enormous. However, an ill-prepared government has made the situation even worse, with Europe playing hardball in negotiations in an attempt to make the UK renege on its decision. The legislation required to formally leave the EU, Article 50, has yet to be triggered, meaning there is likely to be more bumps in the road for GBP in 2017.

BTCManager penned an open letter to Britons around the time of the EU referendum on June 24, urging Bitcoin as a store of value with the British Pound experiencing extreme volatility. After setting multi-decade lows, GBP has yet to sustain a recovery against not just Bitcoin, but the US Dollar as well with GBP-USD hovering around 1.2200 at the time of writing. While Britons may have made some gains selling GBP-USD or holding US Dollars, they would have realized an even greater gain if they parked their money into bitcoin.

On the Coinfloor exchange, BTC-GBP was at £479.00 week ending June 26, 2016, following our open letter to Britons. Fast forward to the close of 2016, BTC-GBP is looking to break above the £800 mark and is taking aim at the psychological £1000 level. With a break above the all-time high, there is no precedent and £1000 could be a conservative estimate for the long-term, but we will see some exhaustion from bulls at this level.

Bitcoin Reaches All-Time High Against EUR and GBP - 2

Bitcoin has already detached itself from financial markets by outperforming every major asset in 2016. With a flood in the market of interested buyers, will bitcoin experience the effect of a merry-go-round? Individuals from different nations pushing to the psychological level of one thousand in their respective currencies, with each attempt reinforcing the next.

With one fiat currency succumbing to this barrier, it is not hard to imagine the rest following.

First up to break the thousand psychological level will be XBT-EUR, then BTC-USD then eventually BTC-GBP. Therefore, it will be interesting to see what reaction will be from global markets once the market has scaled the $1000 level. In our previous bitcoin price analysis, we stated two targets, $991.35 and $1335, whereby the following target corresponds roughly to a price of £1000 per bitcoin.

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