Bitcoin rallies as bullish trend prevails

Bitcoin price rallied on Tuesday, rising from $94 to $97,000 as a bullish trend prevailed. Bitcoin price pared losses later in the day, rising to $94,400. If BTC price declines, support can be found at $88,890, while resistance may be encountered at $103,000. 

Ethereum price also gained strength on Tuesday, rising from $3,130 to $3,230. If Ethereum's price declines, it may encounter support near $2,900, while if it increases, resistance may be encountered near $3,400.

Bitcoin price registered a new all-time high of $108,200 in December after US President-elect Donald Trump confirmed plans to build a Bitcoin strategic reserve. Donald Trump has openly declared his support of crypto markets, announcing that he will make the US ‘the crypto capital of the planet’. Growing expectations that the new government will adopt a pro-crypto regulatory and fiscal policy have been boosting crypto markets, especially since Donald Trump reaffirmed his pre-election commitment to build a Bitcoin strategic reserve. 

The uncertainty surrounding US President-elect Donald Trump’s trade tariffs is causing a risk aversion sentiment driving high-risk assets down. Last week, conflicting reports on US President-elect Donald Trump’s future economic measures caused turmoil in markets. The uncertainty surrounding Trump’s proposed tariffs put pressure on Crypto markets, as Trump’s risky economic plans lowered the appeal of high-risk assets such as cryptocurrencies. 

Trump will take office on January 20 and his proposed tariffs could potentially ignite trade wars. In addition, Tramp’s plans may reignite inflationary pressures. Concerns that global inflation will rise, have triggered a risk aversion sentiment, putting pressure on crypto markets. 

Cryptocurrency prices are also affected by central banks’ interest rates. The US Federal Reserve cut interest rates by 25 basis points at its latest meeting to a target range of 4.25% to 4.50%.  Indications that the Fed will follow a more hawkish approach than previously anticipated are putting pressure on crypto markets. Fed Chair Jerome Powell’s stance has been more hawkish lately, emphasizing the need to be cautious about further rate cuts.

Geopolitical concerns are promoting a risk aversion sentiment, lowering the appeal of high-risk assets such as cryptocurrencies. The situation between Russia and Ukraine remains critical. In addition, tensions between Israel and Lebanon have cooled after the ceasefire deal, but hostilities between Israel and Hamas continue in the Gaza area.

BTC/USD 1h Chart

ETH/USD 1h Chart

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Written by:
Myrsini Giannouli

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