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Cryptocurrency prices edged higher on Monday on renewed risk sentiment. Crypto bulls attempted to push Bitcoin above the $25,000 level resistance but did not manage to create an uptrend. Monday was a Bank Holiday in the US and was a slow day for crypto markets. Major cryptocurrencies are still holding on to last week’s gains but a fresh bullish run does not seem to be imminent yet.
Last week, US inflation data showed that price pressures remain high and are not easing at the anticipated pace. 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%. Nevertheless, cryptocurrencies rallied as risk sentiment was renewed.
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 edged higher on Monday, testing the $25,000 level resistance, but not managing to overcome this resistance. If the BTC price declines, support can be found near $21,400, while resistance may be encountered near $25,000.
Ethereum price also rose on Monday, testing the $1,715 resistance without breaking through that barrier. If Ethereum's price declines, it may encounter support near $1,630, while if it increases, resistance may be encountered near $1,715.
BTC/USD 1h Chart
ETH/USD 1h Chart
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Myrsini Giannouli
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