Bitcoin on track for $110,000

Bitcoin price surged this week, hitting new all-time highs every day and touching the $108,200 mark on Tuesday for the first time in history. If the BTC price declines, support can be found at $99,000, while resistance may be encountered at the psychological level of $110,000. 

Ethereum price dipped on Tuesday, dropping from $4,040 to $3,870. If Ethereum's price declines, it may encounter support near $3,640, while if it increases, resistance may be encountered near $4,100.

Bitcoin price registered a new all-time high of $107,690 on Monday after US President-elect Donald Trump confirmed plans to build a Bitcoin strategic reserve. Bitcoin price continued to rise on Tuesday touching $108,200 for the first time in history and flirting with the $110,000 milestone. 

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 on Monday, boosting crypto markets. Speaking to CNBC on Sunday, Trump stressed that other world powers like China are accumulating cryptocurrencies and stated that he wants the US to stay ahead in building a crypto strategic reserve.

Cryptocurrency prices are also affected by central banks’ interest rates. High interest rates are restricting economic growth, putting pressure on risk assets, while the promise of rate cuts boosts crypto markets. A Fed rate cut this week is fully priced in, propping up cryptocurrencies. Markets anticipate, however, that the Fed will lower interest rates on Wednesday but will point to a hawkish outlook for the following months. Many analysts predict that the central bank will keep interest rates steady in January, putting pressure on crypto markets.

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, with Russia threatening to use nuclear missions against Ukraine. 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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