Cryptocurrency prices fall as tech stocks slide

Most major cryptocurrencies declined on Thursday, as US stocks and especially tech stocks fell. Crypto markets have been following the overall trends of stock markets, which slid on Thursday, pushed down by rising dollar and US bond yields.

Bitcoin price fell below the $40,000 key level on Thursday. If Bitcoin price declines, it may find support at $37,500 and $36,000, while resistance may be found near $48,200 and further up at the psychological level of $50,000. Over the weekend, the Luna Foundation Guard (LFG), acquired $173 million in Bitcoin, and on Wednesday, added over $100 million to its reserves.

Ethereum's price has been boosted as the release of a long-awaited software upgrade is drawing near. Ethereum price also fell on Thursday though, falling below the $3,075 level support, close to the $3,000 level. In case its price continues to decline, it may find support near $2,820, while resistance may be encountered near $3,800.

The shift of major central banks towards a more hawkish fiscal policy has been putting pressure on cryptocurrencies. Most major Central Banks are turning towards a tighter policy and a return to pre-pandemic interest rates, driving cryptocurrency prices down. Increasingly hawkish Fed rhetoric in the past couple of weeks is pointing to a steep rate hike at the Fed’s next policy meeting in May, putting pressure on cryptocurrencies. 

This week, record-high inflation data in the US have increased the odds of a 50 base points increase in the Fed’s benchmark interest rate in May. On the other hand, investors are starting to use cryptocurrencies as a hedge against inflation, which could provide a boost to crypto markets, as inflation is expected to peak in the following months.

Reports of renewed Russian attacks against Ukraine have dashed hopes for a diplomatic resolution to the conflict any time soon, putting pressure on risk assets. On Wednesday, hopes for a resolution of the crisis between Russia and Ukraine were diminished, as Russian President Vladimir Putin announced that diplomatic talks with Ukraine are at a dead end. 

New western sanctions on Russia are also reducing demand for risk assets, with both the US and the EU announcing a new round of sanctions, targeting financial institutions, commodities and individuals. 

BTC/USD 1h Chart

ETH/USD 1h Chart

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Written by:
Myrsini Giannouli

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