Bitcoin flirts with $38,000

Bitcoin price edged higher on Monday, rising above the $37,500 level. If BTC price declines, support can be found near $35,150, while resistance may be encountered near $38,000. 

Ethereum also gained strength on Monday touching the $2,050 level. If Ethereum's price declines, it may encounter support near $1,900, while if it increases, resistance may be encountered near $2,090.

Cryptocurrencies are propped up by expectations that the Securities and Exchange Commission (SEC) will shortly grant spot Bitcoin exchange-traded funds (ETF) applications. BlackRock and other institutions have applied for a Bitcoin ETF, which would bring more institutional and retail money into crypto markets. The SEC has been hesitant regarding the future of Bitcoin ETFs, delaying the decision possibly until January. BlackRock has also filed an ETH spot ETF for approval, causing Ethereum prices to surge.

Cryptocurrency prices remained largely unaffected on Monday by the SEC’s most recent delay in granting spot ETF approvals. Bitcoin gained strength on Monday, flirting with the key $38,000 level. Can crypto markets maintain their slightly bullish momentum even if the SEC delays approvals further?

Increases in central banks’ interest rates are putting pressure on risk assets. Most major central banks, however, are hitting pause on rate hikes, propping up crypto markets. FOMC members have voted to keep interest rates unchanged at a 22-year high within a target range of 5.25% to 5.50%. The Fed’s decision to pause rate hikes has increased risk appetite, boosting cryptocurrencies, especially since markets anticipate that the Fed has reached its rate ceiling. 

The Fed’s hawkish stance over the past year has been paying off and US price pressures are cooling. Inflation in the US eased more than expected in October, driving down rate hike expectations and boosting risk appetite. Inflation in the US surprised on the downside, as headline inflation rose by 3.2% year-on-year in October from 3.7% in September, against expectations of a 3.3% print. 

BTC/USD 1h Chart

ETH/USD 1h Chart

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Written by:
Myrsini Giannouli

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