Bitcoin (BTC) saw a period of consolidation on Oct. 27 after hitting its highest levels in six weeks, resulting in sideways movement.
Bitcoin’s Stability in Response to GDP Data
According to data from Cointelegraph Markets Pro and TradingView, BTC/USD was hovering around $20,500 on Bitstamp, following local highs of $21,012 the day before.
The leading cryptocurrency mirrored the performance of U.S. equities at the Wall Street open, with the S&P 500 remaining steady and the Nasdaq Composite Index showing a slight decrease of about 1%.
Simultaneously, the U.S. dollar index (DXY) started to recover from its earlier losses, posing a challenge to risk assets after a week of decline and reaching its lowest levels since mid-September.
Ahead of the Federal Reserve’s interest rate decision, the Gross Domestic Product (GDP) data revealed a recovery in the U.S. economy in the third quarter.
Eric Winograd from AllianceBernstein commented on the GDP data, suggesting that despite the positive headline, the signal it sent about the future economic strength was weaker than the previous one.
In Europe, the European Central Bank (ECB) implemented an expected rate increase of 0.75%.
Michaël van de Poppe, the founder and CEO of trading firm Eight, summarized the significance of the day with the ECB policy decision and U.S. GDP data.
“Bitcoin has remained stable at these levels, surprising many who anticipated a more significant correction after the recent surge.”
According to the latest figures from CME Group’s FedWatch Tool, the likelihood of the Fed adopting a 0.75% rate hike stood at 90.8% on that day.
A Trader’s Reminder of the $14,000 Return
Upon examining the weekly BTC/USD chart, trader Rekt Capital highlighted the importance of reclaiming the zone just below $22,000 for the continuation of a bullish trend.
In an update on Oct. 26, Rekt Capital noted the slow approach of BTC towards the red resistance area.
Another analyst, Il Capo of Crypto, emphasized that the $21,500 level would need to serve as a foundation for consolidation if bulls aimed for a price of $23,000.
Il Capo’s primary scenario involved a potential reversal to new macro lows for BTC/USD, with a potential drop to $14,000.
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