Cryptocurrency prices plummeted last week, as global recession concerns drove riskier assets down. A steep cryptocurrency selloff was triggered, as bearish tendencies have prevailed in crypto markets. The crypto industry has been under pressure since the beginning of the year and the results are becoming apparent, with mounting layoffs in crypto firms and huge losses in trading volumes.
Bitcoin price edged lower on Wednesday, struggling to hold onto the $20,000 key level, after falling below this level during the weekend for the first time in over two years. If Bitcoin price declines, support may be found at $19,200 and further down at the psychological level of $15,000, while resistance may be found near $32,300 and at $40,000.
Ethereum price also dropped on Wednesday and is currently trading just above the key $1,000 level. If the Ethereum price continues to fall, support may be found near the psychological level of $500, while resistance may be encountered at $2,000 and higher up at $2.170.
Market sentiment has been fragile during the past few weeks, causing volatility in stock markets and cryptocurrencies alike. Crypto markets have been known to follow the overall trends of stock markets and especially of tech stocks. In addition, a strong risk-off sentiment has prevailed since the beginning of the year due to geopolitical tensions, driving investors to safer assets and dampening the appeal of cryptocurrencies.
An increasing number of major Central Banks are moving towards a tighter fiscal policy to tame soaring inflation rates. Last week, the US Federal Reserve voted to raise its benchmark interest rate by 75 points and the BOE by 25 base points. Other major banks, such as the Bank of Switzerland and the Bank of Canada, are also raising their interest rates, halting the ascend of oil prices. Stalling economic growth, combined with fiscal tightening gives rise to fears of recession driving cryptocurrency prices down.
BTC/USD 1h Chart
ETH/USD 1h Chart
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