Major cryptocurrencies were stable on Wednesday, after bouncing off of 2-year lows on Tuesday, indicating that their collapse might have been arrested for the time being. The low cryptocurrency prices have attracted buyers, with Bitcoin and Ethereum showing some signs of recovering.
Bitcoin price climbed to $16,500 on Wednesday. If BTC declines, support can be found at $15,000, while resistance may be encountered at $18,150 and higher up at the psychological level of $20,000.
Ethereum price rose to $1,070 on Wednesday and remained stable most of the day. If Ethereum's price declines, it may encounter support further down at the psychological level of $1,000, while if it increases, resistance may be encountered near the psychological level of $1,500.
Risk sentiment was renewed on Wednesday, boosting crypto markets and stock markets. The minutes of the latest FOMC meeting released on Wednesday revealed that many FOMC officials were in favor of slowing rate hikes soon. 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 has hit crypto markets hard after the recent collapse of FTX. The FTX token faced liquidity issues, triggering a generalized crypto market sell-off. FTX CEO Sam Bankman-Fried has resigned and the company declared bankruptcy. These developments have undermined confidence in the crypto industry, giving rise to concerns of a cascading crypto crisis. Though many cryptocurrency-related institutions are still at risk from the fallout, such as Crypto Bank Silvergate, which has seen its stock price plummeting this month.
BTC/USD 1h Chart
ETH/USD 1h Chart
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