Bitcoin climbed above the $42,000 level on Tuesday, trading around $42,500. If Bitcoin price falls, it may find support at $36,000 and $33,000, while resistance may be found near $44,300. Ethereum price also rose on Tuesday, testing the $3,000 level resistance. Ethereum may find support at $2,489. In case its price goes up, it may find further resistance at $3,400.
Most major cryptocurrencies have rallied over the past few days, with Ethereum outperforming Bitcoin. Ethereum rose more than 16% in the past week, while Bitcoin rose 8.4%, as the release of a long-awaited software upgrade in Ethereum seems to be drawing near, boosting its price.
The shift of major central banks towards a more hawkish fiscal policy has been putting pressure on cryptocurrencies over the past few months. Last week, the Federal Reserve raised its benchmark interest rate by 25 base points, bringing its benchmark interest rate to 0.50%. The BOE also announced a 25-base points rate hike after its monetary policy meeting last Thursday, raising its interest rate to 0.75%.
After the announcement of the Fed rate hike, however, cryptocurrency prices climbed, as the interest rate raise fell within market expectations and was already priced in by markets. Similarly, the BOE rate hike on Thursday had seemingly little effect on cryptocurrencies. The Fed and BOE policy statements were interpreted by investors as less hawkish than expected, benefitting cryptos.
Cryptos have been under pressure since the beginning of the year, hit by a bout of risk-aversion. Mounting geopolitical tensions have been driving the price of cryptos down, as investors shy away from risk assets. Diplomatic talks between Russia and Ukraine have sparked hope of a de-escalation of the crisis, providing relief to crypto markets.
In addition, most major cryptocurrencies have received a boost over the past couple of weeks, as demand from Russian and Ukrainian markets increased. Bitcoin volume from Russian markets has increased considerably, as Russian investors aim to escape the plummeting Rouble and Russian sanctions. ECB President Christine Lagarde, in her speech at the Bank for International Settlements Innovation Summit on Tuesday, warned against Russia using cryptocurrencies to bypass economic sanctions.
BTC/USD 1h Chart
ETH/USD 1h Chart
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