Cryptocurrencies surge as Hong Kong opens Crypto trading

Reports that Hong Kong would open crypto trading for retail investors boosted cryptocurrencies on Tuesday. Hong Kong's Securities and Futures Commission announced on Tuesday that it would accept applications from exchanges to offer crypto trading to retail investors from June 1. The announcement provided support for major cryptocurrencies on Tuesday, as Hong Kong will only accept tokens with a 12-month track record and substantial market capitalization. 

Bitcoin gained strength on Tuesday, climbing to the $27,400 level. If the BTC price declines, support can be found near $26,400, while resistance may be encountered near $27,500. Reports that Tether, the largest asset-backed stablecoin, would invest up to 15% of its net profit into Bitcoin every month boosted Bitcoin. 

Ethereum price was catapulted to the $1,870 level on Tuesday. If Ethereum's price declines, it may encounter support near $1,740, while if it increases, resistance may be encountered at $1,900.

The crypto market was also supported by renewed risk sentiment this week, as optimism prevailed on the looming US debt ceiling. Risk sentiment fluctuates, causing volatility in risk assets. Mounting economic concerns put pressure on risk assets. The ongoing debate around the US debt ceiling is causing economic uncertainty, pushing cryptocurrency prices down. 

US Treasury Secretary Janet Yellen has warned that the office would not meet all US government obligations by June 1. Last week, however, US President Biden stated that he is confident that he, and House Speaker McCarthy, will agree on the budget. The two leaders have yet to reach an agreement on the US debt ceiling, but negotiations continue as the clock runs down. Growing debt ceiling optimism improved risk sentiment this week, providing support for cryptocurrencies.

Signs that major central banks are starting to wind down their hiking cycles provide support for risk assets. The Federal Reserve raised interest rates by 25 basis points at its latest monetary policy meeting, bringing the benchmark interest rate to a 16-year high target range of 5.00% to 5.25%. The US Central Bank has signaled that its hawkish policy is coming to an end, boosting risk assets. US Federal Reserve Chair Jerome Powell indicated on Friday that the US Central Bank may pivot towards a more dovish direction.

BTC/USD 1h Chart

ETH/USD 1h Chart

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Written by:
Myrsini Giannouli

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