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Cryptocurrencies recover as risk sentiment rises

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Written by:
Myrsini Giannouli

08 September 2022
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Risk sentiment continued to shift, rising slightly on Wednesday. Renewed risk sentiment boosted stock markets and crypto markets alike on Wednesday. 

Global recession fears have been propping up safe-haven assets and pushing down cryptocurrency prices. Risk sentiment was renewed on Wednesday, as odds of a large Fed rate hike in September were dampened. Less hawkish than expected FOMC member's speeches on Wednesday moderated market expectations of an increase in the US Central Bank’s interest rate. Severe rate hikes stifle economic activity, putting pressure on cryptocurrencies. Markets are currently wavering between a 50-bp and a 75-bp Fed rate hike in September.

Bitcoin’s collapse was halted on Wednesday and the cryptocurrency recovered a little, rising above the $19,000 level after crashing to almost $18,500. If BTC continues to fall, support can be found at the $17,600 level representing the yearly low, while resistance may be encountered near $20,500 and further up at $21,800. 

Ethereum also rallied late on Wednesday, climbing back above $1600, after falling below $1,500 early in the day. If Ethereum's price declines, it may encounter support near $1,550 and further down at $1,420. If the Ethereum price rises, resistance may be encountered near $1,640 and higher up to $1,720.

Ethereum has gained support this week on reports that Ethereum main net merge will begin on September 6th. Ethereum Classic, a hard fork of Ethereum, hit an all-time high hash rate on Monday. 

Ethereum price has been boosted in anticipation of the so-called ‘merge’, which will pass through a series of phases in the next couple of weeks and is expected to be finalized on September 19th. The Merge from the Proof-of-Work to the Proof-of-Stake method will be a significant network upgrade that is expected to lead to an increase in demand for Ethereum. 

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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