Crypto markets boosted by rising risk sentiment

Bitcoin and other major cryptocurrencies extended gains on Monday on rising risk sentiment. 

Bitcoin price climbed to the $17,400 level on Monday. If the BTC price declines, support can be found near $16,370, while resistance may be encountered at $18,360. 

Ethereum price rose to $1,340 on Monday. If Ethereum's price declines, it may encounter support near $1,180, while if it increases, resistance may be encountered near $1,350.

The crypto industry has suffered huge losses in trading volumes in the past year, with global cryptocurrency market capitalization dropping from $2.3 trillion at the start of 2022 to $830 billion currently. 

Souring risk sentiment has dampened the appeal of cryptocurrencies, driving investors to safer assets. Most major Central Banks, such as the US Federal Reserve, the ECB, and the BOE raised interest rates considerably over the past year, fuelling global recession concerns and driving risk sentiment down. 

Even though inflation rates remain high, signs of cooling price pressures have reduced rate hike expectations recently, 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. Many market participants believe that the cryptocurrency selloff is nearly over and that current low prices offer an investment opportunity.

Increased risk aversion sentiment also hit crypto markets hard after the collapse of FTX. The FTX token faced liquidity issues, triggering a generalized crypto market sell-off and undermining confidence in the crypto industry. 

BTC/USD 1h Chart

ETH/USD 1h Chart

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Written by:
Myrsini Giannouli

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