Crypto markets slow as traders await Fed rate decision

Bitcoin continued trading below the $40,000 psychological level on Tuesday, with prices ranging between $38,000 and 39,500 and Ethereum traded mostly within the $2,500-2,600 range. If Bitcoin price falls, it may find support at $36,000 and $33,000, while resistance may be found at $40,000 and further up near $44,300. Ethereum may find support at $2,600 and further down around $2,300. In case its price goes up, it may find resistance at $3,000 and further up at $3,400.

The Federal Reserve holds its long-awaited meeting on Wednesday and is expected to raise its benchmark interest rate by at least 25 base points. Similarly, the BOE is expected to announce a rate hike after its meeting on Thursday. The shift towards a more hawkish fiscal policy has been putting pressure on cryptocurrencies over the past few months. The two major central banks are widely expected to raise their benchmark interest rates by 25 bs and these rate hikes have already been priced in by markets, however. More steep rate hikes would likely drive crypto prices further down, while rate hikes that fall within market expectations might boost cryptocurrency prices.

Cryptos have been under pressure since the beginning of the year, hit by a bout of risk-aversion. Mounting geopolitical tensions have been driving the price of cryptos down, as investors shy away from risk assets. Most major cryptocurrencies have received a boost over the past couple of weeks, however, as demand from Russian and Ukrainian markets increased. Bitcoin volume from Russian markets has increased considerably, as Russian investors aim to escape the plummeting Rouble and Russian sanctions.

BTC/USD 1h Chart

ETH/USD 1h Chart

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Written by:
Myrsini Giannouli

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