Cryptocurrency prices were under pressure on Tuesday, as risk sentiment soured. Crypto bulls attempted to push Bitcoin above the $25,000 level resistance on Monday, but increased economic growth concerns drove risk assets down on Tuesday.
US inflation data last week showed that price pressures remain high and are not easing at the pace anticipated. US headline inflation in January dropped to 6.4% year-on-year versus the 6.2% expected, illustrating the danger of inflation becoming entrenched, which may force the Fed to rethink its recent dovish pivot.
The Federal Reserve raised interest rates by only 25 basis points at its February meeting, bringing the benchmark interest rate to a target range of 4.50% to 4.75%. Current market odds lean towards further tightening in the upcoming Fed meetings and an increase in interest rates up to 5.25%.
Prolonged rate hikes fuel global recession concerns, driving risk assets down. As inflation starts to cool though, central banks are starting to lower the pace of rate hikes, which may revive risk sentiment.
Bitcoin price dipped on Tuesday, dropping to $24,200. If the BTC price declines, support can be found near $21,400, while resistance may be encountered near $25,000.
Ethereum price also declined on Tuesday, touching the $1,640 level. If Ethereum's price declines, it may encounter support near $1,630, while if it increases, resistance may be encountered near $1,715.
FOMC Meeting Minutes on Wednesday may provide additional information on the Fed’s future policy direction and may affect cryptocurrencies.
BTC/USD 1h Chart
ETH/USD 1h Chart
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