Bitcoin Bulls Dissipate Ahead of FOMC Meeting
- The price of bitcoin fell over 2% on European exchanges due to stronger inflation in Spain.
- Bitcoin traders are leaving their positions as market turmoil peaks this year.
- Expect bitcoin price to drop to $21,969 looking for support.
Bitcoin (BTC) price plummets on European trade as a volatile week kicks off with unexpected Spanish inflation data. Markets were forecasting a decline of 5.7% to 4.97%. Instead, inflation jumped to 5.8%. This confirms what the central banks have been shouting for the last few weeks and what the markets have been ignoring. Is reality catching up this week?
The price of bitcoin will fall due to the appearance of a wave of headwind
The price of bitcoin is making traders nervous as this week could be the toughest week of the first quarter of 2023. Not only are the US Federal Reserve, the European Central Bank and the Bank of England set to release their forecasts and monetary policy, but the US jobs report is due on Friday. . There cannot be more variables available to trigger the motion of the circular saw on the graph.
These developments will make bitcoin trading more difficult and could cause many traders to end the week with a loss, depending on where bitcoin trades at Friday night’s official close.
Bitcoin, meanwhile, received a false break and rejection against $23,878.62 and fell on Monday as the rally was fueled by profit taking. The Relative Strength Index (RSI) is also declining and should break through the overbought barrier in search of consolidation. Expect bitcoin to drop to almost $21,969 by the end of this week if all central bank events and the US jobs report are factored in.
Bitcoin (BTC/USD) daily chart
If the bulls resisted current events, or if the central bank acted very favorably and signaled that inflation could only come down from here, markets would jump on this positive narrative.
Expect a break above $23.878 and a move up again confirms that the rally is moving away from this pivot. While $28,695 remains very high and high, profit levels will be back on the table earlier this week.
Philip Lagert, FXStreet
Former Forex Seller/Trader at ING, Trade Execution Expert.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Forex Quebec. Every investment and trading move involves risk, so you should do your own research when making a decision.
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