- Bitcoin trades above $30k despite the dollar strengthening against other fiat currencies
- News that BlackRock prepares to launch a spot Bitcoin ETF helped
- SEC’s lawsuits create uncertainty
Bitcoin trades at a 1-year high after breaking out of a consolidation that looks like a bullish flag pattern. As such, the cryptocurrency has made a new higher high, keeping the bullish bias intact despite consolidating since April.
While trading above $30k it is hard to make a bearish bet on Bitcoin. That is specifically true if looking at what happened in the traditional currency market, where the US dollar strengthened across the board.
For example, the EUR/USD exchange rate dropped from 1.10 to 1.0850 on news that the European PMIs weakened more than the market expected. Also, the GBP/USD dropped on weak UK data.
All in all, the dollar strengthened last week, but it did not gain against Bitcoin.
Just the opposite.
What drives the Bitcoin price higher?
By now, it is obvious that the dollar’s weakness did not drive the move higher. Therefore, something else must be the cause of this bullish breakout.
Two possible explanations exist.
One is related to BlackRock, the American multinational investment company, one of the largest in the world. News surfaced that the company submitted an application for a spot Bitcoin ETF designed to track the underlying market price of Bitcoin. Therefore, some argue that BlackRock might know something in advance.
Another is that investors’ trust in the industry builds up with the recent SEC lawsuits. A more transparent industry should be a positive for crypto investors.
Regardless of the reason, Bitcoin trades above $30k on the dollar’s strength against other fiat currencies. If the divergence continues, Bitcoin might have more upside.
On the flip side, no one knows how the cryptocurrency market will react to the Binance and Coinbase verdicts.