Bitcoin Price Facing Correction Or The Beginning Of A Downtrend?

By the end of the weekend, Bitcoin’s price slightly collapsed to $624. This may be the beginning of a long downtrend if buyers stay passive while sellers are taking the initiative into their hands.

CoinIdol.com asked our cryptocurrency expert Daniel Dabek, founder of Safe Exchange and curator of Alt Coin Trading Community, to comment on the price reduction.

“Bitcoin dropped right onto a support level. Strong buy orders are resting at $630 price across leading Bitcoin exchanges. If the price continues up from this bounce the market will have to retest the resistance at $660.”

We believe that the reason for this sharp decline of the Bitcoin price was the first publication of the US GDP report for the 2nd quarter. The Index went positive and increased by 1.2%, but this number is lower than expected. As a result, the EUR reacted immediately by rising to $1.1164. The weakening of the USD caused a decrease in the Bitcoin price. Moreover, these statistics impugn the possibility of the raising of interest rates by the US Federal Reserve in the future, which may also lead to a weakening of the Dollar and Bitcoin.

Weekly BTC/USD exchange rates (July 26 – August 1):

But this is the first and not the only estimate of US GDP, two more reports are coming. As the practice shows, further reports are usually better than the first of the year. Therefore, the situation can be corrected in a positive direction.

Today, we are waiting for other macroeconomic reports on the manufacturing sector, like the PMI index of business activity for the manufacturing sector. In the US, the business activity in the manufacturing sector is increasing, so we should expect positive data. A positive report would strengthen the Dollar against the Euro. Also PMI data in the Euro area and the United Kingdom will be published as well.

However, today Bitcoin should expect a strengthening of selling pressure. $600 is a support level. $630 is a resistance level.

This analysis and forecast are the personal opinions of the author and are not a recommendation to buy or sell cryptocurrency.