Bitcoin Price Forecast: BTC bulls dissipate ahead of big central bank week

Bitcoin (BTC) price tanks in European trading as this volatile week kicks off with surpriseSpanish inflation data. Markets predicted a drop from 5.7% to 4.97%. Instead, inflation jumped to 5.8%. This confirms what central bankers have been shouting throughout the past few weeks and what markets have been ignoring. Is reality catching up this week?

Bitcoin price set to tank as a wave of headwinds emerge

Bitcoin price sees traders on edge as this week might be the toughest for the first quarter of 2023. Not only are the US Federal Reserve, the European Central Bank and the Bank of England set to bring out their forecast and monetary policy, but also the US job report comes on Friday. There could not be more variables available to trigger whipsaw moves on the chart. These events will make BTC more difficult to trade and might force a lot of traders to close the week with a loss, depending on where BTC is trading at the official closing bell on Friday evening.

BTC, meanwhile, received a false breakout and rejection against $23,878.62 and tanked this Monday as the rally came under pressure by profit-taking. The Relative Strength Index (RSI) is also tanking and is set to break below the overbought barrier in search of some consolidation. Expect BTC to drop near $21,969 by the end of this week once all central bank events and the US job report have been considered.

BTC/USD daily chart

Should bulls withstand the current events or should one central bank come out very supportive and signal that inflation can only go down from here, markets would jump on that positive narrative. Expect a break above $23,878, and a higher jump would confirm the rally again by moving away from that pivotal level. Although $28,695 remains very high and elevated, the profit level will be back on the table at the beginning of this week.