Bitcoin catches its breath: How far can the correction continue?

© Reuters – After trying to exceed the key threshold of $35,000 on Tuesday and Wednesday, the stock fell slightly on Thursday, in what looks more like a healthy catch-up than a real correction.

Recall that the fell to a low at $33,770 on Thursday, and is displayed around $34,100 this Friday morning (down 2.4% over 24 hours, but still up more than 18% over a week), against a high of $35,175 earlier this week.

Note that this correction, observed on most cryptocurrencies, was undoubtedly favored by the figures above expectations for American GDP published yesterday, and which showed quarterly growth of 4.9% against 4.3% anticipated, for an index of GDP price at 3.5% versus 2.5% anticipated.

While this data did not call into question the prospect of a pause for next week’s Fed meeting, it clearly increases the risk that the Fed will be forced to keep rates high for longer than expected.

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However, a high interest rate environment is considered a bearish factor for cryptos, as evidenced by their plunge in 2022 in the face of rapid monetary tightening by central banks.

As for today, another important data for the Fed will be expected, with the Core PCE price index. Just as was the case yesterday with GDP, data higher than expected could strengthen the Dollar and weigh on Bitcoin and other cryptocurrencies.

Technical thresholds to monitor on Bitcoin

From a graphical point of view, the Bitcoin trend remains largely positive. However, the RSI indicator, strongly in overbought territory, suggests that the correction could further amplify.

bitcoin daily chart

If BTC actually continues to lose ground and returns below $34,000, the next potential supports will be the thresholds of $33,000 and $32,000. On the upside, $35,000 and the recent yearly high of $35,175 form an immediate resistance zone.

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