Stock markets and crypto markets continued to withdraw last week, ending the second quarter of 2022 in a slump. Stock markets have had their worst first half of the year in decades, while crypto markets have suffered huge losses since the beginning of the year. Cryptocurrency prices have been following stock market trends and the pressure on stocks has been transferred to cryptos.
On Monday, risk appetite grew, pushing the dollar down and benefitting riskier assets such as cryptocurrencies. Global stock markets and especially European stocks gained, while US stock markets were closed for the 4th of July Bank Holiday.
Many market participants have also decided to buy cryptocurrencies at their recent low prices, in the expectation that they have reached the bottom. Traders are buying the dip for major cryptocurrencies, preventing crypto markets from crashing.
Bitcoin whales propped up the cryptocurrency on Monday, as a bullish trend prevailed. BTC climbed above the $20,000 key level on Monday, testing the $19,200 level support and reaching its lowest price since November 2020. If the Bitcoin price declines, support may be found at the $19,200 level, and further down at the psychological level of $15,000, while resistance may be found near $23,000 and $32,300.
Ethereum price also recovered on Monday, climbing above $1,100. the support at the psychological level. If Ethereum's price continues to decline, it may encounter support at the $1000 level, representing its lowest price since January 2021 and further down at the psychological level of $500, while resistance may be encountered at $2,000 and higher up at $2.170.
A steep cryptocurrency selloff was triggered in the past few weeks, as bearish tendencies have prevailed in crypto markets. The crypto industry has been under pressure since the beginning of the year and the results are becoming apparent, with mounting layoffs in crypto firms and huge losses in trading volumes.
An increasing number of major Central Banks, such as the Fed and the BOE are moving towards a tighter fiscal policy to tame soaring inflation rates. Stalling economic growth combined with fiscal tightening gives rise to fears of recession, promoting a risk-aversion sentiment and putting pressure on cryptocurrencies.
BTC/USD 1h Chart
ETH/USD 1h Chart
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