BTC/EUR: What has happened in 2019?

So far, 2019 has proved to be a year of highs and lows for Bitcoin’s euro-denominated exchange rate, or BTC/EUR.

The cryptocurrency started 2019 priced at just €3,380, a huge drop from the highs of over €14,000 that were achieved during the unprecedented Bitcoin boom of December 2017. More than a year later, the market was still recovering from the cryptocurrency crash of 2018, which saw a massive sell-off amid concerns about regulation, light trading volumes in Asia, and an unsustainable price run-up.

Despite 2019’s lacklustre start, there was a sense of optimism in the market. The nightmare of 2018 was finally over and trading volumes indicated a substantial increase in investor interest. This sentiment proved to be justified as a look at the BTC/EUR price chart shows a steady upwards trend from January 2019 until the summer.

Sizzling summer

Things really started heating up in June when Bitcoin’s price topped €11,000, hitting its highest level in euro-denominated terms in 17 months on June 26. Despite this, on a month-to-date basis, BTC/EUR was only up by about 28.7%, whereas BTC/USD showed a 31.2% increase. Some analysts suggested Bitcoin’s relative underperformance in EUR terms could be associated with the fact that the euro had strengthened 2% against the US dollar during June.

Nevertheless, the summer continued to be a strong season for Bitcoin, with the cryptocurrency once again climbing above €11,000 in July after a few short-term dips. So far, the €11,234 price that was reached on July 10 has proved to be the high of 2019, representing a gain of 232% from the beginning of the year.

Downward trend

Unfortunately, autumn turned out to be a less fruitful season for Bitcoin. The Bitcoin price has mostly been on a downward trend since mid-August, and at the time of writing, it is around €8,424 – albeit still 40% higher than it was 12 months ago.

There have been a couple of occasions over the past two months when the price of Bitcoin has plummeted. On September 27, for instance, around a fifth was wiped off the value of Bitcoin and, indeed, off all the other major digital currencies. The crash took mere minutes and, subsequently, Bitcoin continued to trade down for several days. Analysts blamed the sudden drop in price on various technical issues.

“Bitcoin has been due a price break for some time,” Simon Peters, analyst at eToro, told the Independent.

“Since reaching $14,000 back in June, the crypto asset has been making ‘lower highs’ and ‘higher lows’, forming a ‘symmetrical triangle’ chart pattern converging towards an apex. Generally, this pattern precedes a breakout either higher or lower, and this is what we saw yesterday.”

The price of Bitcoin took another nose dive on October 23, falling from around €7,200 to €6,670. Some reports suggested the drop was caused by Bitcoin whale trades on the crypto exchange Bitstamp. Thomas Lee of Fundstrat told Financial Review the drop was simply part of a “consolidation, with potential downside risk in the near-term”. He added that conditions would probably improve within the next 10 weeks.

Buying opportunity?

For bullish investors out there, the current BTC/EUR price of €8,424 could be seen as a buying opportunity. eToro’s Simon Peters recently pointed out that fundamentals such as hash rate remain strong and adoption of crypto is still moving forward at pace. Indeed, BTC/EUR has risen by 12% over the past month, largely thanks to a huge upswing on October 25 and 26, which many believe was driven by Chinese President Xi Jinping’s announcement that the country will focus on blockchain development.

In the long term, an increase in the BTC/EUR price could be helped by the arrival of institutional investors to the market, as well as growth in the number of retailers who accept Bitcoin as a payment method. The latter will require more investment in online payment infrastructure across Europe.

No one, of course, really knows what will happen to the price of Bitcoin going forwards – especially as this year has been volatile to say the least. There is, however, a sense of optimism in the market following the most recent price surge, with some traders saying it could mean a full trend reversal for Bitcoin. For now, all we can say is watch this space.