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Cryptocurrencies tumble as risk-off sentiment prevails

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Written by:
Myrsini Giannouli

06 May 2022
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A strong risk-off sentiment prevailed on Thursday, as markets had time to assess the Fed policy statements. Stock markets crashed, with the Dow plummeting by more than 1,000 points, led by tech stocks. Most major cryptocurrencies also plummeted on Thursday, as crypto markets have been following the overall trends of stock markets and especially of tech stocks. 

On Wednesday, the Fed raised its benchmark interest rate by 50 base points, its highest rate hike in 22 years. 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.

Bitcoin fell sharply and is currently testing its $36,000 level support. 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 on Thursday, reaching $2,700. If the ETH price declines further, it may find support at $ $2,440, while resistance may be encountered near $3,174.

Continued Russian hostilities against Ukraine have increased risk-aversion sentiment, putting pressure on crypto markets. The situation between Russia and Ukraine continues to escalate, as Russian President Vladimir Putin makes threats about using nuclear weapons, while he cuts off the gas supply to Poland and Bulgaria. 

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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