Cryptocurrency traders are familiar with trading major pairs; however, BTCUSD stands out by pairing an established digital coin with fiat money.
Trading this pair allows you to take advantage of both rising and falling cryptocurrency prices without actually purchasing the underlying asset itself, by trading CFDs instead.
Crypto-to-fiat currency pair
Most currency traders are well acquainted with the major pairs, as well as an array of minor pairs. But one trading pair that is rapidly gaining momentum: BTCUSD – pairing Bitcoin against US dollars.
Fiat-referenced crypto assets are an ideal trading choice as they can be traded globally without needing to convert to local currency first. When selecting your pairs for trading, make sure they offer high liquidity so you can buy and sell assets easily and swiftly.
Institutional money poured into the cryptocurrency market in 2021 in an unprecedented surge, led by major companies like Tesla and MicroStrategy Incorporated investing heavily. As a result, Bitcoin prices increased exponentially; and this trend may continue if major players in the financial sector adopt and regulate them in ways that won’t restrict innovation or technology development.
Fundamentals
Fundamental analysis of Bitcoin refers to an investigation of its intrinsic value as an asset. This process includes looking at factors like network hash rate, adoption rates and economic trends as well as non-quantifiable variables like market sentiment and regulatory changes.
Bitcoin stands apart from traditional currencies in that its intrinsic value does not lie in tangible assets like gold and silver, yet the blockchain technology behind it holds tremendous promise. As more people adopt its use, demand will increase while scarcity drives its price; however, cryptocurrency may face obstacles due to new regulations that hamper its decentralized nature; investors also await key US economic reports with any misses likely leading to selloffs while beats could spur rallies; therefore investors should proceed with caution when making trading plans and monitor technical levels carefully.
Technical analysis
BTCUSD cryptocurrency has been in a holding pattern for several weeks since reaching an all-time high in May. At present, its price range lies between $30k to $40k; representing both 50% retracement from its peak and also 1.618 Fibonacci extension from it.
As with any asset, many factors influence its value; global events can have a tremendous effect on Bitcoin prices; such as devaluations of currency of countries where investors live could prompt them to either purchase or sell Bitcoins.
Another factor is regulation, which can make investors pessimistic or optimistic about the future of cryptocurrency investments. For instance, comments by US regulators can cause investors to panic and drive price swings lower or higher; such fluctuations are usually short-lived but have lasting repercussions for an asset’s price; one way to predict such trends is analyzing an asset’s price history.
Trading
The BTCUSD pair combines one of the world’s premier cryptocurrencies – bitcoin* – with one of the most influential fiat currencies: US dollar. This pairing reveals how many dollars must be paid in order to buy one bitcoin (which serves as the base currency).
Buy and sell of currency pairs is available both directly and through CFDs, providing a flexible and efficient method to trade assets while protecting capital. However, before opening a position with any broker it is wise to conduct research and avoid high leverages as these can lead to total losses.
In 2021, Bitcoin BTCUSD reached an all-time high of around $65,000 before retreating due to a variety of headwinds such as COVID-19 lockdowns and the Bitcoin Halving Event which reduced mining rewards and limited its supply. Furthermore, USD gained strength due to rising interest rates and inflation concerns which triggered profit taking and bearish sentiment in the market.
