- Bitcoin price has declined sharply in the past few months.
- Bitcoin has formed a bearish flag against the euro and pound.
- It has formed a bearish flag pattern, signaling that a breakout is about to happen.
Bitcoin price continued falling on Tuesday as global volatility jumped. The BTC/EUR pair crashed to 19,566 while the BTC/GBP fell to 16,554. The two pairs have declined by more than 67% from their highest levels in November 2021.
Bitcoin price crash gains steam
On Monday, we warned that the Bitcoin price could crash to $10,000 in the near term. One of the main reasons for this is that the US dollar has been in a strong bullish trend in the past few months. The closely watched US dollar index has surged from less than $100 in January to over $108. And analysts expect that it could soar to $110 this year.
Bitcoin has also crashed against other currencies. The BTC to EUR pair has crashed to 19,566 even as the euro has continued falling. The euro declined to parity against the US dollar for the first time in decades. This declined happened a few weeks after the euro moved below parity against the Swiss franc.
There are several reasons why the euro has been in a strong bearish trend in the past few months. For example, the European Central Bank (ECB) has been left behind by other banks in tightening. And analysts expect that the bank will hike by just 0.25% this month. In the same period, the Fed is expected to hike by 0.75%.
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Meanwhile, the BTC to BTC price has also plummeted even as the pound has dropped by over 10% this year. Unlike the euro, the Bank of England (BOE) has been relatively hawkish this year. It has hiked interest rates in the past five straight meetings and analysts expect that there are more hikes to come.
The pound has also declined because of the ongoing political changes in the country. Conservative MPs are now competing on who will become the next prime minister after Boris Johnson resigned.
BTC/GBP forecast
The BTC to GBP, BTC to EUR, and BTC to USD have a close correlation as shown in the chart above. The daily chart shows that the BTC/GBP pair has moved below the important level at 24,460, which was the lowest level in January this year.
Bitcoin has also crashed below the 25-day and 50-day moving averages, signaling that bears are in control. It has also formed a bearish flag pattern that is shown in blue. Therefore, there is a likelihood that the pair will soon have a bearish breakout as bears target the key support at 15,000. The same price action will happen in the BTC/USD and BTC/EUR pairs.
