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Risk sentiment was uncertain this week, causing volatility in crypto markets. Cryptocurrencies plummeted on Thursday as risk sentiment soured. Prolonged rate hikes fuel global recession concerns, driving risk assets down.
Fed rhetoric this week was hawkish, putting pressure on crypto markets. The initial market interpretation of Fed members’ speeches was ambiguous, as markets have been anticipating a pause in rate hikes after the Fed’s next policy meeting. Repeated speeches by Fed members though have begun to drive the message home that further rate rises should be expected and that interest rates will need to remain high for a long period.
On Tuesday, Fed Chair Jerome Powell confirmed that the disinflation process has begun but emphasized that it still has a long way to go. On Wednesday, FOMC member Williams emphasized that for a few years, a restrictive stance must be maintained, but did not commit to a specific ceiling for the Fed’s interest rates this year. Fed’s Cook on Wednesday was more hawkish, stating that the central bank aims to restore price stability, which will require a restrictive monetary policy for some time. Rate hikes have become less aggressive, but the Fed might continue raising interest rates for longer than previously expected.
Bitcoin price dropped below the $22,390 level support on Thursday, touching $21,800. If the BTC price declines, support can be found near $20,450, while further resistance may be encountered near $25,000.
Ethereum price also edged lower on Thursday, dropping to $1,520. If Ethereum's price declines, it may encounter support near $1,518, while if it increases, resistance may be encountered near $1,789.
Global cryptocurrency market capitalization has started to recover this year and remains above $1 trillion. Crypto bulls are hoping that the recent cryptocurrency selloff has passed and that market confidence in the industry will be restored. Bears are fighting back, however, pushing cryptocurrency prices down.
BTC/USD 1h Chart
ETH/USD 1h Chart
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