Cryptocurrencies edge higher as markets absorb rate hikes

Cryptocurrency prices edged higher on Thursday, as markets started coming to terms with the Fed’s hawkish stance at Wednesday’s policy meeting. The US Fed raised its interest rate by 75 basis points on Wednesday, driving down crypto markets. Federal Reserve Chair Jerome Powel has raised expectations for future rate hikes, stating that the Fed is determined to curb inflation even at the expense of economic growth. Steep rate hikes increase global recession concerns, putting pressure on risk assets like cryptocurrencies. 

On Thursday, the BOE voted to raise its interest rate by 50 basis points. The BOE’s raise was lower than anticipated, as markets had priced in a rate hike of up to 75 bp, and the more moderate outcome propped up cryptocurrencies.

Bitcoin price climbed above $19,300 on Thursday. If BTC declines further, support can be found at the $19,200 level and further down at $17,600, while resistance may be encountered near $20,500. 

Ethereum price climbed above the $1,300 level on Thursday. If Ethereum's price declines, it may encounter support at the psychological level of $1,000. If Ethereum's price increases, resistance may be encountered near $1,640.

The long-anticipated Merge was completed last week, but the Ethereum price crashed after the merge. The Merge from the Proof-of-Work to the Proof-of-Stake method is a significant network upgrade that is expected to lead to an increase in demand for Ethereum. It is also a more environmentally-friendly consensus model, limiting drastically the energy consumption and carbon footprint of Ethereum.

Ethereum's price had been boosted in anticipation of the merger for months. The hype created around the merger had created a bullish sentiment for the cryptocurrency, which deflated following its completion, triggering a selloff.

BTC/USD 1h Chart

ETH/USD 1h Chart

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Written by:
Myrsini Giannouli

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