Cryptocurrencies extend losses on increased rate hike expectations

Cryptocurrencies extended losses on Wednesday as hawkish Fed minutes pointed to further rate hikes up ahead. Crypto bulls attempted to push Bitcoin above the $25,000 level resistance on Monday but increased economic growth concerns drove risk assets down later in the week.  

The minutes of the latest Fed meeting were released on Wednesday and were more hawkish than expected, putting pressure on crypto markets. The minutes confirmed that FOMC members believe that there is still more work to be done to tackle inflation and the Fed might raise interest rates for longer than previously expected. 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%.

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 dipped on Wednesday, dropping to $23,600. If the BTC price declines, support can be found near $21,400, while resistance may be encountered near $25,000. 

BTC/USD 1h Chart

ETH/USD 1h Chart

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Written by:
Myrsini Giannouli

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