In recent discussions surrounding Bitcoin (BTC) and its potential future price trajectory, crypto-enthusiasts and analysts alike are finding new correlations to dissect. Most notably, a correlation with the EURUSD pair (the euro against the US dollar) has come into the spotlight due to a Twitter thread by esteemed analyst Josh Olszewicz.<\/p>\n
Olszewicz begins by setting the stage, drawing attention to the widely acknowledged inverse correlation between Bitcoin and the DXY (US Dollar Index). He notes, \u201cMost are aware of the strong historic BTC-DXY inverse correlation. DXY is a USD index against a basket of currencies which has a EURUSD weighting of around 58%. So the BTC-EURUSD correlation should also be relatively high.\u201d<\/p>\n
Will Bitcoin Price Follow EURUSD?<\/h2>\n
What\u2019s intriguing here is the observation Olszewicz makes about the BTC-EURUSD correlation in the period following the pandemic and the last Bitcoin halving. He mentions that the \u201cpost-pandemic (post-halving) EURUSD pair has led BTC in both the bullish and bearish direction by anywhere from a month to a full year.\u201d<\/p>\n This pattern, if it continues to persist, might spell some bearish tendencies for Bitcoin. Olszewicz goes on to suggest that, \u201cIf this relationship continues to hold, BTC should break down towards the BTFP low of $20k.\u201d This statement is a significant one, indicating a potential substantial drop from its current position, all based on the movement patterns of the EURUSD.<\/p>\n Further supporting this projection, he highlights a technical pattern observed in both BTC and EURUSD, stating, \u201cthe EURUSD has completed a bearish H&S, similar to BTC, providing technical fuel for further downside.\u201d A \u2018bearish H&S\u2019 refers to the bearish \u2018head and shoulders\u2019 pattern, a chart formation that predicts a bullish-to-bearish trend reversal.<\/p>\n However, it\u2019s not all gloom and doom. Olszewicz does provide a glimmer of hope for Bitcoin bulls. He posits, \u201cIf you\u2019re bullish on BTC here, you\u2019re either hoping this relationship weakens\/breaks, or the EURUSD begins to strengthen instead of continuing to weaken.\u201d<\/p>\n Olszewicz also touches upon some \u201ctin foil\u201d speculations, discussing how the BTC-EURUSD correlation had been seemingly disrupted during Bitcoin\u2019s second high in November 2022. He suggests that the continued fall of EURUSD did not immediately impact Bitcoin\u2019s bullish trend, speculating that actions from major crypto players like 3AC, FTX\/Alameda, and the Anchor BTC reserve might have played a role.<\/p>\n He states, \u201cIt is both possible and likely that the funny business behind the scenes by 3AC & FTX\/Alameda, as well as the Anchor BTC reserve, helped delay the inevitable bearish trend by about a year.\u201d<\/p>\n While correlations can provide insight, they are by no means a guarantee of future market movements. Investors should exercise caution and conduct their own research when making investment decisions. Rose Premium Signals added, \u201cinteresting observation about the BTC-EURUSD correlation. It\u2019s essential to consider multiple factors in crypto analysis. The relationship could indeed evolve, impacting BTC\u2019s future movements.\u201d<\/p>\nBTC\u2019s Second High Does Not Fit<\/h2>\n
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