Cryptocurrencies struggled to rebound last week, with Bitcoin and Ethereum testing key psychological support levels. Bulls tried to push cryptocurrency prices higher but failed to overcome strong crypto market bearish tendencies, triggered by stock market uncertainty.
On Monday however, major cryptocurrency prices rallied, as global stock markets moved higher. Most major cryptocurrencies held onto their gains on Tuesday, supported by stock markets. Global stock markets were lifted on Tuesday, led by IT stocks. Crypto markets have been known to follow the overall trends of stock markets and especially of tech stocks. Renewed market risk sentiment boosted stock markets this week and supported cryptocurrency prices.
Bitcoin climbed above the $30,000 key level on Monday, and rose even higher on Tuesday, trading above 32,000. If Bitcoin price declines, support may be found at $30,000 and further down near $26,700, while resistance may be found at $40,000 and further up near $48,200.
Ethereum climbed just above its $2,000 level support on Monday but failed to hold on to this key level, trading below $2,000 on Tuesday. If the Ethereum price declines, further support may be found near $1,700, while resistance may be encountered near $2.960 and higher up at $3,174.
The shift of major central banks towards a more hawkish fiscal policy has 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.
The Fed has raised its benchmark interest rate by 50 base points and the BOE also increased its interest rate by 25 bp. The ECB has also indicated that it will move towards a more hawkish policy, increasing market expectations that it will raise its interest rates in July.
In addition, a strong risk-off sentiment has prevailed over the past few months, driving investors to safer assets and dampening the appeal of cryptocurrencies. In the past six months, the cryptocurrency market has lost almost $2 trillion.
BTC/USD 1h Chart
ETH/USD 1h Chart
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