Cryptocurrency prices continued their decline on Tuesday, ahead of the next FOMC policy meeting, as increasingly hawkish Fed policy has led to expectations of a sharp rate hike this week.
The shift of major central banks towards a more hawkish fiscal policy has been putting pressure on cryptocurrencies. Most major Central Banks are turning towards a tighter policy and a return to pre-pandemic interest rates, driving cryptocurrency prices down. Increasingly hawkish Fed rhetoric is pointing to a steep rate hike of 50 base points at the Fed’s next policy meeting on Wednesday, boosting the dollar and putting pressure on cryptocurrencies.
Crypto markets have been following the overall trends of stock markets and especially of tech stocks. Last week, rising tech stocks boosted cryptos, although crypto markets remain under pressure from the rising dollar. Cryptocurrency prices are expected to remain volatile this week, as continued risk-aversion sentiment, coupled with hawkish Fed policy may drive their prices down.
Bitcoin fell below the $38,000 level on Tuesday, testing the $37,500 level resistance. If Bitcoin price declines, it may find further support at $36,000, while resistance may be found at $40,000 and further up near $48,200 and at the psychological level of $50,000.
Ethereum also plummeted on Tuesday, dropping below the $2,820 level support. 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
ETH/USD 1h Chart
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