BTC Price Analysis: Bitcoin price withstands market turmoil as rally pauses

Bitcoin (BTC) price is on a very technical path or trajectory on its venture toward $21,969 as each time either a cap or support got tested to the tick before the rally continued the next day. Unfortunately, the last jump from its support is a bit too far, and to make matters worse, the Bank of Japan and the ECB are throwing a spanner in the works of the rally. Expect some doubt in the rally as, for now, no new highs will be made. Instead, look for support to be identified before buying into the price action again.

Bitcoin price will break above $22,000 soon enough

Bitcoin price sees the legs being cut off from its rally after the Bank of Japan remained unchanged on its yield curve control, whereas markets were expecting a major change to the monetary policy. Meanwhile, on the other side of the globe, Europe woke up with hawkish comments from European Central Bank (ECB) member Villeroy erasing the idea that the ECB would stop at 25 basis points in February. This triggered a complete reversal in most currency pairs against the US Dollar, which initially strengthened on the back of the BoJ statement but saw its gains turn into losses with a devaluing Greenback against most currencies. 

BTC sees this reflected in its price action as only very small gains are being printed for now. Add to that the element that the Relative Strength Index (RSI) is too far into overbought territory, and as easy as 1+1 equals 2 a fade is bound to happen. Bulls will trigger a small drop in profit-taking, the RSI gets the chance to slip below the overbought barrier, and traders will get the chance to buy in at $20,000 before swinging back up toward and then above $21,969.

BTC/USD daily chart

The big risk to the downside would come with markets wrongly prepared for the US Federal Reserve. Should the Fed communicate in the coming weeks that it will remain hiking well into the summer, a big market readjustment would be needed to factor that information in as markets are suggesting that the US Fed is near finished with raising interest rates. Expect in this scenario for Bitcoin price to slice through $20,000 as a knife through butter and rather see $17,500 as the support level with the all-important 55-day Simple Moving Average as support to catch any falling knives.