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Crypto markets benefit from high-risk sentiment

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Written by:
Myrsini Giannouli

03 February 2023
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Risk assets rallied on Wednesday and remained strong on Thursday. Crypto markets gained strength after Wednesday's Fed monetary policy meeting on renewed risk sentiment. 

After a series of aggressive rate hikes last year, the Fed has finally decided to relax its hawkish policy, boosting cryptocurrency prices. The Federal Reserve raised interest rates by only 25 basis points at Wednesday’s meeting, bringing the benchmark interest rate to a target range of 4.50% to 4.75%. Even though inflation rates remain high, cooling price pressures have induced the Fed to scale back its rate hikes, providing support for riskier assets. Fed Chair Jerome Powell stated that the disinflation process has started, boosting stock markets and crypto markets, in anticipation of lower interest rates by the end of the year.

In addition, the International Monetary Fund revised its global economic growth outlook, easing recession concerns. According to the IMF World Economic Outlook, the global economy is expected to grow by 2.9% this year, raising optimism for economic recovery. 

Bitcoin price tested the resistance at $23,900 on Thursday, touching $24,000. If the BTC price declines, support can be found near $22,390, while further resistance may be encountered near $25,000. 

Ethereum price also gained strength on Thursday, rising to $1,700. If Ethereum's price declines, it may encounter support near $1,518, while if it increases, resistance may be encountered near $1,660.

Global cryptocurrency market capitalization has started to recover this year 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. 

BTC/USD 1h Chart

BTCUSD 1hr chart


ETH/USD 1h Chart

ETHUSD 1hr chart

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Written by:
Myrsini Giannouli

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