Cryptocurrencies extend gains on reduced rate hike bets

On Tuesday, Bitcoin and other major cryptocurrencies extended gains on reduced Fed rate hike expectations. 

Federal Reserve Chairman Jerome Powell stressed on Tuesday that the Fed will have to make tough decisions to bring US inflation down, but avoided commenting directly on the central bank’s monetary policy outlook, turning market attention to the US inflation report later in the week. US inflation data are scheduled to be released on Thursday and are this week’s most highly anticipated fundamentals, as they may influence the Federal Reserve’s monetary policy.

Souring risk sentiment has dampened the appeal of cryptocurrencies, driving investors to safer assets. Most major Central Banks, such as the US Federal Reserve, the ECB, and the BOE raised interest rates considerably over the past year, fuelling global recession concerns and driving risk sentiment down. 

Even though inflation rates remain high, signs of cooling price pressures have reduced rate hike expectations recently, providing support for riskier assets. The Fed and other central banks are starting to scale back their aggressive rate hiking, raising hopes of a reversal in cryptocurrencies’ downfall. Many market participants believe that the cryptocurrency selloff is nearly over and that current low prices offer an investment opportunity.

Bitcoin price climbed to the $17,470 level on Tuesday. If the BTC price declines, support can be found near $16,370, while resistance may be encountered at $18,360. 

Ethereum price reached $1,345 on Tuesday. If Ethereum's price declines, it may encounter support near $1,180, while if it increases, resistance may be encountered near $1,350.

BTC/USD 1h Chart

ETH/USD 1h Chart

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Written by:
Myrsini Giannouli

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