Bitcoin dodges a deep setback against the euro and a strong foundation could be behind this

BTC Bitcoin coin ot top of pile of Euro and euro – cent coins and Euro bank notes.

Bitcoin seems attractive against the euro, as the European Central Bank says it will leave the negative rates intact.

The exchange rate of bitcoin to euro on January 24 dodged a deep downward attempt after recovering from its local support of € 7.4577.77. The last upward movement led the pair upward by 6.20 percent, indicating that the bulls are still in charge of the trend in the euro-denominated markets.

Bitcoin’s rebound against the euro also followed its supersonic growth in the last monthly session. From December 18, 2019 until the time of writing this article, the reference cryptocurrency increased by 36.32 percent (as of 12:39 UTC).

While investors showed signs of profit-taking, which reduced the price, a large part still clings to bitcoin that could be due to a very strong fundamental indicator.

Weaker euro

Investors continue to decrease their bets on the euro as the fiat currency continues to decline against the US dollar. Upon entering 2020, the exchange rate from the euro to the dollar has plummeted to 1.99 percent as of January 27. And given the bleak basics, the European fiat is likely to remain bearish.

Part of the fundamental points point to the mixed PMI data published last week. He pointed out that manufacturing data across the European Union could contract in January, but at a smoother pace than in December last year.

On the other hand, the President of the ECB, Christine Lagarde, said during the World Economic Forum that they will maintain stable negative rates, spilling more downward pressure on the euro. He also hinted at new rate cuts to adjust inflation to his preferred range.

The US dollar, on the other hand, emerged stronger against the euro, which shows that investors treated it as a hedge against the weakening of monetary policy and, in part, against the possible outbreak of coronavirus.

Looking for alternatives in Bitcoin

Bitcoin and the Euro show a weak negative correlation with each other, probably indirectly, as investors continue to limit the latter’s market exposure.

So far, the price movements of bitcoin against the euro are in tune with its advantages in the dollar market. The cryptocurrency, however, would probably benefit as long as the ECB sticks to monetary relaxation. Eurozone growth remains weak, which is further reflected in employment growth that fell to its minimum of five years in 2019.

An oversold euro could, therefore, send investors to look for new inflation coverage alternatives driven by the ECB. Bitcoin, emerging from itself, could benefit greatly, especially in the year when its supply rate would be reduced by half.

Reference: newsbtc.com

Disclaimer: This press release is for informational purposes information does not constitute investment advice or an offer to invest. The views expressed in this article are those of the author and do not necessarily represent the views of infocoin, and should not be attributed to, Infocoin.

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