Cryptocurrencies under pressure as Fed points to further tightening

Bitcoin price edged lower on Wednesday, struggling to maintain the key $30,000 level. If the BTC price declines, support can be found near $29,600, while resistance may be encountered near $31,400. 

Ethereum price also dipped on Wednesday, touching $1,820. If Ethereum's price declines, it may encounter support near $1,713, while if it increases, resistance may be encountered near $1,940.

Fed Chair Jerome Powell delivered a hawkish speech at the ECB Central Bank Forum on Wednesday putting pressure on cryptocurrencies. Powell warned that further tightening should be expected and stressed that consecutive rate hikes may be resumed if required. Powell added that the majority of FOMC members are in favor of two more rate hikes this year. Risk sentiment dropped as the Fed showed signs of resuming its hawkish stance.

The U.S. Federal Reserve kept its interest rate steady at its June meeting to a target range of 5.00% to 5.25%. The Fed signaled, however, that its tightening cycle is not over yet and that its peak rate might be higher than anticipated. 

Crypto markets were also under pressure this week as recent developments in Russia soured risk sentiment, halting the cryptocurrency rally.

Crypto markets surged last week on reports that large financial services institutions have announced major crypto initiatives. BlackRock, the largest asset manager in the world applied what would be the first-ever spot bitcoin ETF in the U.S. In addition, Crypto exchange EDX Markets, which is backed by Citadel, Fidelity, and Schwab, launched operations on Tuesday. Renewed interest in the crypto industry has helped to offset the negative news from Binance and Coinbase, fuelling a cryptocurrency rally last week. The bullish sentiment faded on Monday however, and major cryptocurrency prices began to slip.

BTC/USD 1h Chart

ETH/USD 1h chart

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Written by:
Myrsini Giannouli

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