A bullish trend has prevailed over the past week, driving cryptocurrency prices up. Bitcoin price broke through the $45,000 level resistance during the weekend, rising above $46,500, its highest weekly close yet in 2022. This week, the Bitcoin price continued to climb, reaching $48,000 for the first time since the beginning of the year, and eyeing the $50,000 level. On Wednesday, BTC traded sideways, holding on to its gains. If Bitcoin price falls, it may find support at $36,000 and $33,000, while resistance may be found at the psychological level of $50,000.
Most major cryptocurrencies have rallied over the past week, 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 spiked during the weekend, reaching almost the $3,300 level. ETH traded sideways on Wednesday, testing its $3,400 resistance. If Ethereum's price falls, it may find support at $2,489. In case its price goes further up, it may find resistance near $3,800.
Cryptocurrencies have been under pressure since the beginning of the year, hit by a bout of risk-aversion. Geopolitical tensions have been driving the price of cryptos down, as investors shy away from risk assets. On Tuesday, reports of progress in diplomatic talks between Russia and Ukraine have sparked hopes of a de-escalation of the crisis, providing relief to crypto markets, as demand for risk assets grows. The Ukrainian side has reportedly proposed to abandon its prospects of joining military alliances, in exchange for security guarantees. Russia on the other hand has pledged to scale down military operations in Kyiv and Chernihiv and is reportedly willing to let Ukraine join the EU, with the condition that it does not join NATO. Russia’s pledges have been met with skepticism by the Ukrainian side though, as attacks against Chernihiv continue unabated.
The shift of major central banks towards a more hawkish fiscal policy has been putting pressure on cryptocurrencies over the past few months. The Federal Reserve raised its benchmark interest rate by 25 base points, bringing its interest rate to 0.50% and the BOE also announced a 25-base points rate hike, raising its interest rate to 0.75%. Cryptocurrency prices climbed however after the announcement of the rate hikes, as the interest rate raise fell within market expectations and was already priced in by markets.
In addition, most major cryptocurrencies have received a boost over the past couple of weeks, 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
ETH/USD 1h Chart
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