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Cryptocurrency prices soared on Wednesday as a bullish trend prevailed in crypto markets and Bitcoin price rose by over 2% in 24 hours.
US CPI data on Tuesday 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. January’s CPI print illustrates 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 surged on Wednesday, rising above the $24,000 level. If the BTC price declines, support can be found near $20,450, while resistance may be encountered near $25,000.
Ethereum price also rose on Wednesday, touching $1,670. If Ethereum's price declines, it may encounter support near $1,462, 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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