The Bitcoin price GBP pair features Bitcoin as well as UK’s fiat currency-GBP. As far as Bitcoin is concerned, it remains the leading crypto with nearly 50% market share. However, the crypto is highly volatile, and when it comes to trading the pair, much focus lies on the price movements of the cryptocurrency, which is much higher than that of GBP. Thus, traders who are interested in trading the BTC/GBP pair must first assess the fundamentals of BTC and how it compares with that of the Pound or GBP. In the past few years, GBP has witnessed increased volatility due to uncertainty created by Brexit. Additionally, the currency continues to remain strong due to its historically stable economic and political climate.
In this article, learn more about how Bitcoin Price, GBP price fluctuations affect the pair and how to trade BTC/GBP.
GBP AND BTC- PRIMARY DIFFERENCES
As far as GBP (also referred to as Pound or Sterling) is concerned, its value continues to rise and drop with respect to other traditional or fiat currencies due to macroeconomic factors like economic strength, rates of interest as well as other central bank-related monetary policies and sentiments about future developments. For instance, uncertainty related to Britain’s exit resulted in a massive decline in the pound’s value against its peers like EUR and USD. On the other hand, everything being equal, a hike in the interest rates only strengthens the Pound or GBP. Also, GBP’s volatility varies and is mostly low as well as against other traditional currencies, the same averages close to 0.6percent a day. On the other hand, BTC is highly volatile and records an average daily movement of more than 4%. But BTC is a cryptocurrency that doesn’t belong to any region or country. Thus, the geopolitical and economic factors that affect the price fluctuations of fiat currency have zero impact on Bitcoin. Also, since BTC and other cryptos are relatively new, and still trying to gain the trust of the public, its demand is based on market sentiments, as well as the rates of adoption in the future. For instance, mainstream exchanges that launched Bitcoin futures in 2017 were mainly responsible for driving the bubble or bull run that pushed Bitcoin’s price higher to nearly $20,000 from 1000 dollars earlier during the same year. Similarly, Bitcoin’s value tends to drop when negative information around security, like exchanges getting hacked or cryptos stolen, dampen sentiment.
The BTC/GBP pair is appealing for traders who hold pound denominated accounts. Given that BTC’s volatility is much higher when compared to GBP on a long-term and daily basis, traders looking to trade the pair must focus on the price movements of BTC. Crypto investors must stay abreast with the news related to BTC, such as hard forks. Also, the overall approach of mainstream finance to both crypto and regulation will be crucial for both long-term and intraday trading of BTC/GBP. When holding the pair for the long-term, crypto traders must learn to stay calm when volatility lasts for the short-term. Bitcoin usually drops or rises 10% or higher during a day, or even higher over the week.
CRYPTOCURRENCY TECHNICAL ANALYSIS – HOW TO TRADE BTC/GBP
We had projected a target objective of £31,399 in our previous analysis and Bitcoin rose to an intraday high at £30,936 on January 8. We had also mentioned that the RSI is in overbought levels and such markets can turn around quickly. We saw an example of that on January 11 when the BTC/USD pair plummeted below the 20-day EMA and fell to an intraday low at £21,000. The bulls aggressively purchased the lows, which is a positive sign as it shows strong demand at lower levels. If the bulls can build upon yesterday’s recovery, the pair may again gradually attempt to move up to £30,000. However, the possibility of the uptrend resuming is low. The higher levels are likely to attract selling by traders as many may want to book profits. If the pair fails to break out to new highs, the selling is likely to intensify and that could again pull the price back towards £20,000. The pair could remain range-bound for a few days before starting the next trending move. We do not find any reliable setups that offer an attractive trading opportunity.