Cryptocurrencies hold onto their gains after BoE rate hike

The Federal Reserve raised its benchmark interest rate by 25 base points on Wednesday, bringing its benchmark interest rate to 0.50%. The BoE also announced a 25-base points rate hike after its monetary policy meeting on Thursday, raising its interest rate to 0.75%. The shift of major central banks towards a more hawkish fiscal policy has been putting pressure on cryptocurrencies over the past few months. 

After the announcement of the Fed rate hike, however, cryptocurrency prices climbed, as the interest rate raise fell within market expectations and was already priced in by markets. Similarly, the BoE rate hike on Thursday had seemingly little effect on cryptocurrencies. The Fed and BoE policy statements were interpreted by investors as less hawkish than expected, benefitting cryptos. 

Bitcoin remained above the $40,000 psychological level on Thursday, trading around $41,000. If Bitcoin price falls, it may find support at $36,000 and $33,000, while resistance may be found at $40,000 and further up near $44,300. Ethereum price also went up, climbing above $2,800. Ethereum may find support at $2,489. In case its price goes up, it may find resistance at $3,000 and further up at $3,400.

Cryptos have been under pressure since the beginning of the year, hit by a bout of risk-aversion. Mounting geopolitical tensions have been driving the price of cryptos down, as investors shy away from risk assets. This week, however, diplomatic talks between Russia and Ukraine have sparked hope of a de-escalation of the crisis. In addition, most major cryptocurrencies have received a boost over the past couple of weeks, as demand from Russian and Ukrainian markets increased. Bitcoin volume from Russian markets has increased considerably, as Russian investors aim to escape the plummeting Rouble and Russian sanctions.

BTC/USD 1h Chart

ETH/USD 1h Chart

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Written by:
Myrsini Giannouli

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