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Cryptocurrency prices sank last week and edged lower on Tuesday on increased Fed rate hike expectations. Long rate hikes drive risk assets down. Market expectations of the Fed peak interest rate continue to rise on hotter-than-expected US price pressures, putting pressure on crypto markets. Fed Chair Powell testified before the Senate Banking Committee on Tuesday and his speech was more hawkish than anticipated.
The Fed might raise interest rates for longer than previously expected, putting pressure on crypto markets. Markets have adjusted Fed rate hike expectations from a 25-bp raise to a 50-bp increase in March after Powell’s speech. Current market odds lean towards further tightening in the upcoming Fed meetings and an increase in interest rates in a range of 5.5%-5.75%. Powell will appear before Congress again on Wednesday to continue his address on the Fed’s Semi-annual Monetary Policy Report and his speech is likely to cause volatility in crypto markets.
Uncertainty over the future of Silvergate also put pressure on crypto markets, driving many major cryptocurrency prices down. Global crypto market capitalization has fallen in the past few days to just above the $1 trillion mark. Bitcoin price dropped by 5% in a single hour on Friday night, as concerns about the future of Silvergate bank intensified. FTX fallout has been affecting Silvergate, with the bank facing liquidity problems.
Bitcoin price edged lower on Tuesday, touching the $22,400 level. If the BTC price declines, support can be found near $21,400, while resistance may be encountered near $24,600.
Ethereum price also declined on Tuesday, dropping to the $1,545 level. If Ethereum's price declines, it may encounter support near $1,460, while if it increases, resistance may be encountered near $1,680.
BTC/USD 1h Chart
ETH/USD 1h Chart
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Myrsini Giannouli
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