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Cryptocurrencies rise on renewed risk sentiment

Home >  Daily Market Digest >  Cryptocurrencies rise on renewed risk sentiment


Written by:
Myrsini Giannouli

09 December 2022
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Risk sentiment was renewed on Thursday on hopes of China’s economic recovery, benefitting crypto markets, and stock markets. Chinese authorities finally relaxed some of the harsh Covid restrictions after widespread protests last month. The Chinese government eased some of its strident Covid regulations on Wednesday, abandoning its zero-Covid policy. 

Bitcoin price shot up above the $17,000 level, reaching $17,250. If the BTC price declines, support can be found near $16,000, while resistance may be encountered at $17,400. 

Ethereum price also rose sharply, reaching the $1,280 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.

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. The FTX collapse is likely to cause ripples in the crypto industry for some time, with two US Congress hearings coming up next week.

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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