Choose country & language:

Cryptocurrencies decline as demand for risk assets falls

Home >  Daily Market Digest >  Cryptocurrencies decline as demand for risk assets falls

Written by:
Myrsini Giannouli

06 April 2022
Share the article

Crypto markets have been following the overall trends of stock markets, experiencing heavy losses as the crisis in Ukraine has turned investors’ interest towards safer assets.  This week, reports of renewed Russian attacks against Ukraine have dashed hopes for a diplomatic resolution to the conflict any time soon, putting pressure on risk assets. Diplomatic talks continue, although a de-escalation of the crisis still seems to be some way off, and tensions between Russia and Ukraine intensified. Reports of a new round of western sanctions on Russia are also reducing demand for risk assets.

Last week, the Bitcoin price climbed as high as $48,000 for the first time since the beginning of the year. This week, however, the BTC price retreated, falling as low as $45,500 on Tuesday. If Bitcoin price declines further, it may find support at $37,500 and $36,000, while resistance may be found near $48,200 and further up at the psychological level of $50,000.

Most major cryptocurrencies have rallied over the past couple of weeks, with Ethereum outperforming Bitcoin recently, as the release of a long-awaited software upgrade in Ethereum seems to be drawing near, boosting its price. Ethereum price also climbed last week, reaching above the $3,400 level resistance, to the $3,500 level. ETH is struggling to hold onto its gains this week though, falling to $3,420 on Tuesday. If the Ethereum price falls, it may find support near $3,075. In case its price goes further up, it may find resistance near $3,800.

The shift of major central banks towards a more hawkish fiscal policy has also 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. On the other hand, investors are starting to use cryptocurrencies as a hedge against inflation, which could provide a boost to crypto markets, as inflation is expected to peak in the following months.

In addition, most major cryptocurrencies have received a boost over the past month, as demand from Russian and Ukrainian markets increased. Bitcoin volume from Russian markets has increased considerably, as Russian investors aim to escape the plummeting Rouble and Russian sanctions.

BTC/USD 1h Chart

BTCUSD 1hr chart

 

ETH/USD 1h Chart

ETHUSD 1hr chart

The content provided in this material and/or any other material that this content is referred to, whether it comes from a third party or not, is for information purposes only and shall not be considered as a recommendation and/or investment advice and/or investment research and/or suggestions for performing any actions with financial products or instruments, or to participate in any particular trading strategy and cannot guarantee any profits. Past performance does not constitute a reliable indicator of future results. TopFX does not represent that the material provided here is accurate, current, or complete and therefore shouldn't be relied upon as such. This material does not take into account the reader's financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of TopFX, no reproduction or redistribution of the information provided herein is permitted.

Written by:
Myrsini Giannouli

Share the article:

Latest news

The dollar remains strong on robust US economic data

Myrsini Giannouli 28 September 2022

Gold prices pressured by a strong dollar

Myrsini Giannouli 28 September 2022

Oil prices edge higher on supply concerns

Myrsini Giannouli 28 September 2022

Cryptocurrencies volatile amid market turbulence

Myrsini Giannouli 28 September 2022

Why TopFX

10-years

10-years

industry presence
as a Liquidity Provider

Spreads

Spreads
from 0.0 pips

and reliable execution

Segregated

Segregated

client funds

First-class

First-class

customer support