Bitcoin price could slip below $20,000 if Powell backtracks his comment

Bitcoin (BTC) price sees traders bracing for a big key event that is set to take place on Tuesday. The big event at hand is the US Senate hearing , where Fed Chair Jerome Powell will testify on Tuesday and Wednesday. Without hearing from Powell for over three weeks now, markets will want to hear if Powell has changed his mind about his disinflationary message from February. 

Bitcoin price at risk of 12% drop if Powell changes tone

Bitcoin price is under pressure this Monday as traders will want to keep their powder dry for the main event on Tuesday as Fed Chair Powell is set to take the stage in the US Senate hearing. Markets will dissect his speech for any words or clues pointing to either Powell sticking to his disinflationary plan or backtracking and mentioning that the policy tightening needs to be fired up again. That last outcome would be a big blow to risk assets and could erase the gains from the past weeks in a heartbeat.

BTC is thus in a difficult position with price action opening below the 55-day Simple Moving Average (SMA). With thin volumes, a small slide toward $21,969 looks plausible to find support and await the Powell speech on Tuesday. Should that speech be negative for risk assets, expect a quick decline toward $19,500 with the 200-day SMA and the monthly S2 support level coming in as support to catch the correction.

BTC/USD daily chart

Should support at $21,969 hold, bulls could be very interested in scoping up some Bitcoins here as the psychological level of $22,000 might play its role. Should that fall in line with the message from Powell that the last few data points were one-offs and do not change the view of the Fed that inflation will still come down substantially, a big pop higher is guaranteed. BTC would jump above $23,878 and test the double-top from February near $25,245.