Bitcoin rallies to $95,000

Bitcoin price gained strength on Wednesday, rising from $93,400 to $95,000. If BTC price declines, support can be found at $91,400, while resistance may be encountered at $97,400. 

Ethereum edged higher on Wednesday, rising from $3,330 to $3,370. If Ethereum's price declines, it may encounter support near $3,300, while if it increases, resistance may be encountered near $3,450.

Bitcoin traded below the key $100,000 level last week, as a risk-off sentiment prevailed during the holiday season, putting pressure on riskier assets. Bitcoin price continued earlier in the week, dropping to $92,000 as many traders closed positions and realized their gains ahead of the New Year. Bitcoin price rallied on Wednesday, however, rising to $95,000.

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 announced plans to accumulate a national crypto stockpile. Trump reaffirmed his pre-election commitment to build a Bitcoin strategic reserve, boosting 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 put pressure on crypto markets last week. In his press conference after the policy meeting, Fed Chair Jerome Powell delivered a hawkish message, emphasizing the need to be cautious about further rate cuts. In addition, the Fed’s latest dot plot indicated that only two rate cuts will take place in 2025, down from four projected in September.

Geopolitical concerns are promoting a risk aversion sentiment, however, 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. Meanwhile, the civil war in Syria has been rekindled, further destabilizing the region and lowering risk sentiment.

BTC/USD 1h Chart

ETH/USD 1h Chart

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Written by:
Myrsini Giannouli

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