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Cryptocurrencies plummet amid market sell-off

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Written by:
Myrsini Giannouli

10 May 2022
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A strong risk-off sentiment has prevailed since last week, driving investors to safer assets and dampening the appeal of cryptocurrencies. Stock markets crashed on Monday, with global stocks suffering their worst day since 2020, led by tech stocks. Most major cryptocurrencies also plummeted, as crypto markets have been following the overall trends of stock markets and especially of tech stocks. 

Last week, the Fed raised its benchmark interest rate by 50 base points, its highest rate hike in 22 years and the BOE also increased its interest rate by 25 bp. 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.

Continued Russian hostilities against Ukraine have increased risk-aversion sentiment, putting pressure on crypto markets. The dollar reached a 20-year high on Monday, buoyed by hawkish Fed policy and risk-off sentiment. The rising dollar diminishes the appeal of high-risk assets such as cryptocurrencies.

Bitcoin fell sharply last week and continued to decline on Monday, falling below its $36,000 level support and dropping as low as %31,000 Monday. If Bitcoin price declines further, support may be found near $30000, while resistance may be found at $40,000 and further up near $48,200. 

Ethereum also crashed last week and fell through the $2,440 support on Monday, moving towards the $2,300 level. If the Ethereum price continues to decline further support may be found near $1,700, while resistance may be encountered near $3,174.

BTC/USD 1h Chart

BTCUSD 1hr chart

 

ETH/USD 1h Chart

ETHUSD 1hr chart

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Written by:
Myrsini Giannouli

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