Should you buy Bitcoin as it jumps to a 1-year high?

• 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.&

Bitcoin chart by TradingView

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.&

The post Should you buy Bitcoin as it jumps to a 1-year high? appeared first on CoinJournal.

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