Bitcoin Price Forecast – Prices Drop as Dollar Strengthens

Bitcoin prices dropped hard yesterday on the back of the increasing strength in the US dollar. This was no surprise as almost all the currencies took a hit against the dollar yesterday and hence bitcoin would have been no exception. Those who are new to the trading of bitcoin should understand that like any other currency, bitcoin is also priced against the dollar and hence it is very important to keep track of the movements in the US dollar so that you can trade the bitcoin prices in a better manner.

We had mentioned in our forecast yesterday, when the bitcoin prices were close to $2800, that the prices are likely to face a lot of resistance in that region which could lead to a period of consolidation and could also lead to a drop. And drop it did. One of the major factors for the drop was the Fed decision to hike rates which was also followed by a statement from them in which they chose to brush aside the weak data which have come in the recent times. This was taken as a bullish signal by the traders and hence all the currencies sold off against the dollar.

After moving below the $2250 region for a brief while, we have seen a slight recovery in the bitcoin prices so far but we are likely to see the weakness continue in the prices with the region around $2500 serving as a strong resistance.

Forecast

Technically, we should now see a period of weakness and consolidation between the $2200 and $2550 region in the short term but as said in our earlier forecasts, the uptrend in the bitcoin prices is here to stay in the medium term and it is up to the traders to prepare themselves to combat the volatility and stay in the game as long as possible so that they can make full use of the strength in the bitcoin prices which could move to $3000 and beyond in the medium term.
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