Bitcoin has attained worldwide popularity, becoming the world’s most valuable crypto by market capitalization. Part of Bitcoin’s success can be attributed to its price volatility which provides traders with ample trading opportunities.
BTCUSD is an extremely volatile pair, subject to being affected by any news and events that impact both currencies – any news affecting the US dollar could send the cryptocurrency price tumbling, leading to potential price reductions for both.
Crypto-to-fiat currency pair
Crypto trading pairs allow traders to exchange one cryptocurrency for another. While Bitcoin remains the go-to choice for traders, there are other viable options such as Litecoin and Ethereum available that support peer-to-peer transactions while providing increased security – although Litecoin provides faster transaction speeds. Stablecoins tied directly to fiat currencies like the US Dollar may also be offered through certain platforms.
Crypto-to-fiat currency pairs provide traders with a way to speculate on the prices of different assets. One such pair, BTCUSD, which was first created back in 2009 as an industry benchmark pairing Bitcoin with America’s most influential fiat currency – the American dollar – provides ample opportunity for speculation. Custodial exchanges or margin trading platforms may keep just enough cryptocurrency available in hot wallets to facilitate transactions while the remaining amount will be stored offline securely for safe keeping by reputable exchanges.
Fundamentals
Major influences that shape BTCUSD prices include its global adoption and popularity. Bitcoin is an interesting digital asset with multiple uses; from making payments to acting as a store of value. As its value fluctuates throughout the day due to demand and supply, so too do its prices fluctuate daily.
Investors can assess the fundamentals of Bitcoin by assessing its overall value and intrinsic worth. A way of doing so is using a model which measures stock-to-flow valuation – this approach often works well when used for noncash assets like gold or silver that do not generate cash flows.
One way of evaluating Bitcoin is to measure its performance against other cryptocurrencies and traditional currencies. This information can provide valuable insight into its future potential and value; investors can gauge market sentiment using metrics such as MVRV (which measures the ratio between market capitalization and investor valuation).
Technical analysis
The bitcoin price has been on an unpredictable journey lately. Yesterday, it pushed past its first resistance level at $11,690 before quickly retreating. However, stochastic oscillator suggests oversold conditions which could provide clues for a bullish reversal in near future.
The US Dollar is one of the world’s most widely traded currencies and can have an enormous effect on cryptocurrency prices. As nominal terms measure it as the world’s largest economy while PPP measures it second. This country boasts abundant natural resources, well-developed infrastructure and high productivity levels – characteristics which have given rise to its dominance of economic development over time.
The bitcoin price is currently trading below $4200 and the 100 hourly moving average, signaling further bearish behavior and more decline towards $3800. Conversely, if prices break above the contracting triangle they could move higher to $4500 with MACD moving into bearish territory and an RSI well below 50 levels.
Regulatory bodies
Regulatory bodies will play an instrumental role in shaping Bitcoin’s future. They must ensure a healthy market and protect investors. Furthermore, they should monitor any risks that could cause its collapse as part of an ecosystem such as DeFi.
Regulators have responded well to these challenges by working towards developing regulations for virtual currencies and the IRS has begun treating crypto assets as capital gains.
Institutional money is another powerful ally for Bitcoin. Companies such as Tesla have made large investments in it, having a direct impact on its price. Already this year we have witnessed an inflow of institutional investment – this may continue pushing it higher – though increased regulation could slow gains; particularly true in countries like China which is cracking down on cryptocurrency use through crackdowns of initial coin offerings (ICOs) and investigating various exchanges.
