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Most cryptocurrencies are higher today, with Ripple’s XRP being one of the leading, but BTC to GBP is also up. The reason behind higher Bitcoin prices is geopolitical tensions in the Middle East.
Digital currencies are popular in the region, and people appear to be shifting some of their assets to cryptos to protect themselves if inflation soars. We have already seen crude oil prices rise to a nine-month high, which will lead to higher inflation, but there is a risk that there are other disruptions such as food shortages if the US and Iran would enter into war. It is unclear what will happen next in this crisis, but some strategists say that Iran could target oil tankers, which can further lift crude oil prices. The US also appears to have underestimated the support for Iran, as Iraq has now voted to expel American troops from their country. Forcing American troops out will make it more difficult for America to military engagement with Iran, and it is not likely they will leave voluntarily which will further strain the relationship between Iraq and the US.
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All these geopolitical tensions are favoring higher BTC to GBP prices, and the price is nearing a tipping point. The BTCGBP pair has since last November forming an inverse head and shoulders pattern, with the November 25 low being the left shoulder, the January low at £5210 being the right shoulder, and the December low at £4937 being the head. A neckline goes via the November 29 and December 23 highs, and a break to the £5893.65 could send BTC to GBP much higher, to the £6975.20 level. If the price indeed trades above the £5893.65 level the pattern will remain active, and the trend will continue upwards as long as the price trades above the January low at £5224.65. If the price does take out the £5893.65 level, and instead trades below the December low at £4937, it will mark the resumption of the downtrend.