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Cryptocurrency prices gained strength on Thursday. Crypto markets gain strength as central banks prepare to pause rate hikes. The ECB’s dovish decision on Thursday provided support for cryptocurrency prices. The ECB raised interest rates by 25 bp at its monetary policy meeting on Thursday, bringing its main refinancing rate to 3.75%. However, the ECB had raised interest rates by 50 bp in previous meetings and is slowing down the rate hikes.
The Federal Reserve raised interest rates by 25 basis points at its monetary policy meeting on Wednesday, bringing the benchmark interest rate to a 16-year high target range of 5.00% to 5.25%. The FOMC statement released after the 2-day meeting was dovish, however, boosting risk assets. The US Central Bank has signaled that its hawkish policy is coming to an end, as prolonged tightening is putting the economy at risk and the recent turmoil in the banking sector has increased recession concerns.
The recent banking crisis has undermined trust in the banking system, raising the appeal of investing in less conventional assets, such as cryptocurrencies. Many investors have turned towards cryptocurrencies fearing a globalised meltdown in the banking system. However, renewal concerns about a banking sector meltdown have caused turbulence in crypto markets.
In addition, in a letter to the US Congress, US Treasury Secretary Janet Yellen warned that the office would not meet all US government obligations by June 1. Fears of a US debt default are mounting, but crypto markets have benefitted from the resulting market turmoil.
Bitcoin price gained strength on Thursday, touching $29,300. If the BTC price declines, support can be found near $27,000, while resistance may be encountered near $30,000.
Ethereum price also gained strength on Thursday, climbing to the $1,900 level. If Ethereum's price declines, it may encounter support near $1,780, while if it increases, resistance may be encountered at $1,960.
BTC/USD 1h Chart
ETH/USD 1h Chart
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Myrsini Giannouli
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