26.10.202312:13 Forex Analysis & Reviews: Bitcoin continues its bullish rally: how can U.S. GDP data prevent this?

The Bitcoin bull rally above the $34k level continues despite the gradual formation of a local resistance zone. The bulls continue to push the price of the asset above $34k, leading to the formation of a support zone near the psychological mark of $34k. Over the past two days, buyers managed to consolidate above the $34.5k level, creating additional pressure on BTC/USD quotes in the range of $34.8k to $35.1k.

The bullish potential of the cryptocurrency remains intact as the crowd continues to be in euphoria, and macroeconomic factors have a weak impact on Bitcoin. However, the situation may change today when a series of important macroeconomic statistics will be published in the U.S. and the European Union. Despite the presence of significant buying volumes, it's essential to remember that BTC is still critically dependent on the global economic situation.

Dependence of BTC on the U.S. Dollar

Bitcoin has been in an upward trend for over seven days, but this behavior fits within the logic of its dependency on the U.S. Dollar Index. Investors and traders are confident that the Federal Reserve will not raise the key interest rate at the meeting next week, and the situation in the Middle East remains stable, leading to a weakening of the U.S. Dollar Index and allowing high-risk assets to resume their growth. Bitcoin has also become perceived as a safe haven, on par with gold, due to its growing market capitalization.

However, today at 13:30 GMT, data on the growth of the U.S. GDP in the third quarter of 2023 will be published. The main intrigue lies in the fact that investors expect the U.S. economy to grow by 4.5%, while in the second quarter, the figure barely reached 2.1%. The release of data as per the forecast can create turmoil in investor sentiment in the crypto market and lead to a significant strengthening of the U.S. dollar. This, in turn, will lead to a reduction in investment activity in the crypto market and the beginning of a correction.

BTC/USD Analysis

As of October 26, Bitcoin is trading near the $34.5k level, with daily trading volumes around $24 billion. Over the last three days, there has been a significant decrease in trading activity, especially in Asian markets. Buyers are also struggling to break through the $35.1k level, where a local resistance zone has formed, preventing the price from rising to $36k.

Technical metrics for BTC/USD continue to be in overbought territory, indicating the need for a local pullback to maintain the upward structure. Today's U.S. GDP data can have the necessary impact on the crypto market and contribute to a price drop in Bitcoin to local lows for profit-taking and the redistribution of available BTC volumes.

Among the key support levels that the BTC price may drop to, it's worth highlighting the 0.236 Fibonacci level at $33.2k, as well as the 0.382 level at $32k. In a conservative scenario, significant profit-taking and coin redistribution stages are likely to occur near these levels. However, if the current pace of Bitcoin purchases does not persist, there is a possibility of a worsening downward trend towards the 0.5 Fibonacci level at $31k.

Conclusion

Bitcoin has been continuously rising for seven days, and to maintain its upward structure, a local correction is needed. The release of the U.S. GDP data in the third quarter is likely to have the necessary impact on BTC, although one should also consider the possibility of a muted cryptocurrency response due to the strengthening correlation with gold as a safe-haven asset. In any case, it is important to note that, in the short term, the BTC rally will come to an end and smoothly transition into a consolidation phase.