Crypto markets edged higher on Monday, after retreating last week. On Monday, a risk aversion sentiment prevailed in markets but failed to drag down major cryptocurrencies. Stock markets were affected though and particularly US stocks went down on global recession concerns. It is interesting to note that cryptocurrencies did not follow stock market trends as they have been doing for some time now. Lately, there seems to be a disconnect between crypto markets and stock markets. Last week’s Fed rate hike has destabilized markets considerably, upsetting many market patterns.
The US Fed raised its interest rate by 75 basis points last week, driving down crypto markets. Steep rate hikes increase global recession concerns, putting pressure on risk assets, such as cryptocurrencies. The Fed’s rate hike was largely expected and had already been priced in by markets. Cryptocurrencies have been retreating for the past couple of weeks in expectations of a hawkish Fed outcome and so the effect of the rate hike was somewhat muted. The EU, the UK, Switzerland, and Canada have also tightened their monetary policies recently.
Bitcoin continued trading below the key $20,000 level on Monday, moving below $19,200. If BTC declines further, support can be found at $17,600, while resistance may be encountered near $19,700.
Ethereum price also edged higher on Monday, climbing above the $1,300 level. If Ethereum's price declines, it may encounter support at the psychological level of $1,000. If Ethereum's price increases, resistance may be encountered near $1,407.
Ethereum price had been boosted in anticipation of the merge from the Proof-of-Work to the Proof-of-Stake method. The hype created around the merger had created a bullish sentiment for the cryptocurrency, which deflated following its completion, triggering a selloff.
BTC/USD 1h Chart
ETH/USD 1h Chart
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