Bitcoin struggles to hold on to key support level

Global stock markets slipped on Wednesday, dragging cryptocurrency prices down. Crypto markets have been known to follow the overall trends of stock markets and especially of tech stocks. 

A strong risk-off sentiment has prevailed over the past few months due to geopolitical tensions, driving investors to safer assets and dampening the appeal of cryptocurrencies. As however, the crisis drags on, and risk sentiment is slowly returning to markets. Market sentiment has been fragile during the past couple of weeks, causing volatility in stock markets and cryptocurrencies alike.

Bitcoin struggled to maintain the $30,000 key psychological support level on Wednesday. If Bitcoin price declines, support may be found further down near $26,700, while resistance may be found at $40,000 and further up near $48,200. 

Ethereum also slipped on Wednesday, trading below $1,800. If the Ethereum price declines, support may be found near $1,720, while resistance may be encountered near $2.960 and higher up at $3,174.

The shift of major central banks towards a more hawkish fiscal policy has been putting pressure on cryptocurrencies over the past few months. Most major Central Banks are turning towards a tighter policy and a return to pre-pandemic interest rates, driving cryptocurrency prices down. 

The Fed has raised its benchmark interest rate by 50 base points and the BOE also increased its interest rate by 25 bp. The ECB has also indicated that it will move towards a more hawkish policy, increasing market expectations that it will raise its interest rates in July. This week, the ECB’s monetary policy meeting on Thursday is expected to affect crypto markets as well.

BTC/USD 1h Chart

ETH/USD 1h Chart

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Written by:
Myrsini Giannouli

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