We had mentioned in our forecast yesterday that the bitcoin prices are likely to fall further on fundamental and technical factors and this is what we saw for the first half of the day yesterday. But this was soon followed by a recovery in the prices which has since pushed the prices steadily higher on the back of a weak dollar.
We have been asking our readers to maintain an eye on the dollar prices as well as the bitcoin prices, like that of every other currency, are expressed as a combination of the prices of bitcoin and the dollar. It is very convenient for many of the traders to focus just on the bitcoin aspect of this combination and lose sight of the equally important currency in the dollar. It is very important that the trader has an eye on the relative strength of the dollar as well so that he can trade the bitcoin prices accordingly.
A classic case for this problem came about yesterday when it did seem all lost for bitcoin as it fell towards $2300 during the course of the day. But in the second half of the day, we saw the dollar weakening across the board on the back of some political troubles surrounding the healthcare reforms bill. This helped the bitcoin prices to recover and push through $2400 and it trades comfortably above $2500 as of this writing and continues to look bullish.
Technically, we have some support coming in at the $2480 region and we should see the prices bounce from this region. With the dollar expected to continue to weaken in the short term, we should see the bitcoin prices move higher and continue the bullish trend that we are likely to see in the cryptocurrency industry in the days and the weeks to come.
This article was originally posted on FX Empire