Bitcoin price flirts with $73,000 then plummets

Most major cryptocurrencies have been on a bullish trend for the past few weeks. Bitcoin has crossed major resistance levels, reaching record highs. Bitcoin’s bullish run has renewed interest in crypto markets, boosting other cryptocurrencies as well.

Reports on Monday that the UK will allow crypto trading products, to boost crypto markets. The British Financial Conduct Authority announced on Monday that it would allow recognized investment exchanges to list cryptocurrency-linked exchange-traded products. These products will be in the form of Bitcoin or Ether exchange-traded notes (ETNs).

Bitcoin price broke through the $72,000 level on Monday and touched $72,900 in early trading on Tuesday, before retreating to $71,000. If the BTC price declines, support can be found at $65,000, while resistance may be encountered at the psychological level of $73,000. 

Ethereum price edged lower on Tuesday, dropping below the key $4,000 level. If Ethereum's price declines, it may encounter support near $3,700, while if it increases, resistance may be encountered near $4,200.

Bitcoin is gaining strength as the Bitcoin halving event is approaching. Every halving event cuts the rate at which new bitcoins are released into circulation in half, increasing the scarcity value of Bitcoin. The halving is scheduled approximately every four years, and the next Bitcoin halving event is expected on April 17th raising the value of the cryptocurrency.

The approval of Bitcoin spot exchange-traded funds (ETFs) by the Securities and Exchange Commission (SEC) has caused cryptocurrency prices to surge over the past few months. The SEC has approved 11 applications boosting Bitcoin price. Spot Bitcoin ETF demand has been on the rise, boosting the cryptocurrency as well.

Cryptocurrency prices are affected by central banks’ interest rates. High-interest rates are putting pressure on risk assets, while the promise of rate cuts boosts crypto markets. The Fed kept interest rates unchanged at its latest meeting, within a target range of 5.25% to 5.50%. The Fed has indicated that it is preparing to pivot to a less restrictive monetary policy but the timeline of that is still uncertain with no rate cuts priced in before June this year.

BTC/USD 1h Chart

ETH/USD 1h Chart

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Written by:
Myrsini Giannouli

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