Bitcoin’s Higher High Shows Just How Weak Fiat Currencies are Becoming
Over the weekend, Bitcoin set a pivotal higher high. And although the crypto asset is pulling back slightly with this week’s election uncertainty, a confirmed uptrend could make for clear skies in the weeks ahead.
However, does a lack of a higher high on other top currencies tell a different story about Bitcoin – one that instead highlights the dollar’s weakness more so than the cryptocurrency’s strength?
Top Cryptocurrency Finally Sets Higher High for First Time Since Bull Market Peak
According to Investopedia, the definition of an uptrend is “an overall move higher in price, created by higher swing lows and higher swing highs.” Bitcoin’s higher low on Black Thursday, as frightening as that day may have been, was one step in turning the trend from bearish to bullish.
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The second piece of the puzzle came into play over the weekend when on Halloween and a full moon Bitcoin price exploded all the way to $14,100 at the peak on the BTCUSD pair.
Is a weak dollar really responsible for Bitcoin's higher high? | Source: BTCUSD on TradingView.com
$14,000 BTC is significant in and of itself, but it also set the first higher high on high timeframes since December 2017. The monthly candle closed below the key resistance level of $13,800. When that level is cleared, according to technical analysis, the only resistance that remains is at $20,000.
Dollar Decline: Bitcoin Falls Short of New Highs Against the Euro, Yen, and More
Bulls have been celebrating Bitcoin’s higher high and what they believe to be a confirmed uptrend. But unfortunately, the cryptocurrency has failed to set a higher high against other leading world fiat currencies, suggesting that maybe it is the dollar’s weakness behind the new peak in price, and not an uptrend as expected.
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Against the euro, Bitcoin failed to set a higher high. The pound sterling also came up short from the key level.
The leading cryptocurrency fails to set a higher high against the euro | Source: BTCEUR on TradingView.com
All currencies trade at different values, so it isn’t surprising to see fluctuations between where the crypto asset is versus other assets. Bitcoin has even set a new all-time high against other global currencies, such as the Brazilian real.
The difference is due to weakness in these other currencies, letting Bitcoin gain the upper hand. Against stronger currencies, like the yen, pictured below, Bitcoin again failed to confirm an uptrend.
Japanese crypto investors aren't as convinced, or is the yen stronger than the dollar? | Source: BTCJPY on TradingView.com
Due to the greenback’s global reserve currency role, the dollar trades against all other assets and is the base currency at which exchange rates are set.
Because of the dollar’s dominance, regardless of the failure to produce a higher high in other currencies, BTCUSD is the chart that matters most, and the higher high is in.
Featured image from Deposit Photos, Charts from TradingView.com