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Global recession concerns reignited a risk aversion sentiment on Wednesday. Souring risk sentiment drove crypto markets and stock markets down.
Bitcoin price plummeted on Wednesday, dropping to the $16,700 level. If the BTC price declines, support can be found near $16,000, while resistance may be encountered at $17,400.
Ethereum price crushed on Wednesday, dropping to the $1,220 level. If Ethereum's price declines, it may encounter support at $1,149 and further down at the psychological level of $1,000, while if it increases, resistance may be encountered near $1,350.
The US central bank’s next monetary policy meeting is scheduled for next week on the 14th and traders are trying to gauge the Fed’s policy direction. Market expectations of future rate hikes were considerably trimmed after recent US inflation data showed that inflation is cooling at a faster rate than expected. Reduced rate hike expectations diminish global recession concerns, boosting risk sentiment. Market odds are currently between a 50-bps and a 25-bps interest rate increase in December. Rate hikes are expected to taper off in 2023 as the central bank moves into a stable interest rate.
Risk sentiment received a boost last week, as China's concerns started to ease. Crypto markets and stock markets edged higher in hopes of China’s economic recovery. After days of protests against the crippling Covid lockdowns, Chinese authorities finally seem ready to relax some of the harsh Covid restrictions. The Chinese government eased some of its strident Covid regulations, abandoning its zero-Covid policy.
Increased risk aversion sentiment, however, has hit crypto markets hard after the recent collapse of FTX. The FTX token faced liquidity issues, triggering a generalized crypto market sell-off and undermining confidence in the crypto industry.
BTC/USD 1h Chart
ETH/USD 1h Chart
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