The recent bullish trend of crypto markets was reversed on Monday as crypto bears fought back. Risk sentiment remains uncertain, as global recession concerns keep risk sentiment down, although cooling inflation has brought optimism for economic recovery.
Bitcoin price dropped to $22,600 on Monday. If the BTC price declines, support can be found near $22,390, while resistance may be encountered near $25,200.
Ethereum price also plummeted on Monday, dropping to $1,540. If Ethereum's price declines, it may encounter support near $1,518, while if it increases, resistance may be encountered near $1,670.
Global cryptocurrency market capitalization has started to recover this month and remains above $1 trillion. Crypto bulls are hoping that the recent cryptocurrency selloff has passed and that market confidence in the industry will be restored. Bears are fighting back, however, pushing cryptocurrency prices down.
Even though inflation rates remain high, cooling price pressures have reduced rate hike expectations, providing support for riskier assets. The Fed and other central banks are starting to scale back their aggressive rate hiking, raising hopes of a reversal in cryptocurrencies’ downfall.
The Fed monetary policy meeting this week on February 1st will likely affect cryptocurrency prices. Market odds are currently split between a 50-bp rate hike and a more moderate 25-bp rate hike this week. A potential Fed shift towards a more dovish policy will likely benefit crypto markets, enhancing the current bullish trend.
BTC/USD 1h Chart
ETH/USD 1h Chart
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