Crypto markets plummet on risk-off sentiment

Crypto markets plummeted on Monday as a risk aversion sentiment prevailed. The war erupting between Israel and Hamas has soured risk sentiment putting pressure on cryptocurrencies. 

Bitcoin price dropped sharply on Monday, touching the $27,400 level. If BTC price declines, support can be found near $26,200, while resistance may be encountered near $28,100. 

Ethereum price also plunged on Monday, testing the $1,560 level support before paring some of its losses later in the day. If Ethereum's price declines, it may encounter support near $1,560, while if it increases, resistance may be encountered near $1,670.

Low-risk sentiment in the past couple of weeks has been putting pressure on crypto markets. Global economic concerns are driving risk sentiment down, as prolonged economic tightening restricts economic growth. 

Expectations of further economic tightening are putting strain on cryptocurrencies. Increases in central banks’ interest rates sour risk sentiment, driving risk assets down. The Fed kept interest rates stable at its September policy meeting, but that does not necessarily mean it has reached its rate ceiling. Market odds of another rate hike within the year are high, and interest rates are likely to stay in restrictive territory for a longer period, hindering economic growth. 

BTC/USD 1h Chart

ETH/USD 1h Chart

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Written by:
Myrsini Giannouli

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