BTCUSD is a currency pair representing Bitcoin as one of the world’s top cryptocurrencies against one of the most prominent fiat currencies – USD. It’s a popular tool for trading crypto CFDs where you profit from price movements without actually purchasing an asset underlying this pair.
Numerous factors can affect BTCUSD prices, from positive media coverage to regulatory pressure affecting its value.
What is Bitcoin?
Bitcoin, created in 2008 and popularised by an Asian-sounding person named Satoshi Nakamoto, has quickly become the dominant digital currency on the cryptocurrency market since then. Designed as an instant way of money transfer over the internet without intermediaries or middlemen being involved.
Bitcoin runs on a computer network known as Blockchain that regulates and tracks its currency. Computers in this network verify transactions and are rewarded with bitcoins for their work.
Although Bitcoin does have some beneficial applications, it remains highly volatile and speculative as an asset class. Its value stems from people’s trust in using it as a medium of exchange similar to US Dollar, Euro, or Japanese Yen currencies backed by central banks or governments; making Bitcoin quite different than traditional money systems supported by such institutions as central banks or governments. Yet many believe Bitcoin will become the catalyst for revolution in finance.
How to Trade BTCUSD
Most currency traders are familiar with the major pairs. More experienced traders may even trade exotic pairs such as BTCUSD. But this cryptocurrency pairing might still be unfamiliar to many traders despite being one of the most traded pairs today.
BTC as a cryptocurrency is highly susceptible to volatility; unlike traditional fiat currencies that are backed by central banks, its value is determined entirely by market forces. Furthermore, Bitcoin’s decentralized nature means there are no central controls over how many bitcoins can be created at once.
Trade BTCUSD directly on cryptocurrency exchanges or use CFD (Contract for Difference), which allows traders to speculate on its direction without owning actual coins themselves. Note: this product can increase both your gains and losses.
BTCUSD Technical Analysis
The BTCUSD pair represents the price of Bitcoin against the US Dollar. Bitcoin is one of the world’s most beloved cryptocurrencies and its price movements have an enormous effect on other digital assets.
In 2021, there was an inflow of institutional capital into the cryptocurrency space from companies like Tesla. Their investments gave a substantial boost to the market.
In 2018, there have also been headlines regarding regulation of the crypto industry, which can have either positive or negative ramifications on Bitcoin and other cryptocurrencies. As with anything, regulatory news will continue to have an effect on BTCUSD; good news will drive prices higher while bad news can pressure it lower. Most recently, however, prices have been trading below $4200 which serves as an important support level – breaking below this level would see additional bearish momentum towards $3800 before reaching resistance at $6,500.
BTCUSD Trading Strategy
BTCUSD trading pair is an attractive choice for cryptocurrency traders seeking to capitalize on Bitcoin price movements relative to US Dollar. Positive news regarding cryptospace tends to drive its price upwards while negative press can put downward pressure.
Popular strategies for this pair include dollar-cost averaging (buying an equal amount of Bitcoin at regular intervals regardless of price), arbitrage and news-based trading – the latter often hinges on major events like Federal Reserve interest rate decisions which have an impact on both currencies involved.
Forex traders can apply many of the same strategies they would employ when trading forex to trading BTCUSD, such as using an indicator like On Balance Volume (OBV), which measures money flowing into and out of an instrument over a specified time period. Discover more here about this powerful technical indicator!
