Bitcoin registers all-time high near $94,000

Bitcoin price rose to a new all-time high of $93,860 on Tuesday but dipped sharply to $91,500 as traders rushed to realize gains. If the BTC price declines, support can be found at $86,000, while resistance may be encountered at the psychological level of $95,000. 

Ethereum price dropped from $3,170 to $3,090 on Tuesday. If Ethereum's price declines, it may encounter support near $3,000, while if it increases, resistance may be encountered near $3,430.

Crypto markets gained strength after Donald Trump’s victory in the US Presidential elections. Trump’s proposed tariffs and tax policies will support economic growth, boosting high-risk assets, such as cryptocurrencies. Republicans secured full control of the US Government last week, which will allow Trump’s administration to pass laws more easily. The Republicans have completed the government trifecta, by winning the US Presidency, the majority in the US Senate, and gaining control over the House of Representatives. 

In addition, 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 Bitcoin stockpile.

Geopolitical concerns are promoting a risk aversion sentiment, lowering the appeal of high-risk assets such as cryptocurrencies. Risk sentiment dropped this week, as tensions between Russia and Ukraine flared over the weekend. Russia launched a large airstrike against Ukraine’s energy infrastructure over the weekend. In addition, US President Joe Biden green-lighted Ukraine’s use of US-bought missiles against Russia. Russia has deployed North Korean troops into Ukraine, which fuelled Biden’s decision to permit Ukraine to use the rockets. These long-range missiles can reach deep into Russian territory and Biden’s decision can cause the crisis in Ukraine to escalate further. Ukraine has already launched the first missiles into Russia, according to a report by Bloomberg released on Tuesday. 

Reports that Russian President Vladimir Putin updated Russia's nuclear doctrine boosted safe-haven demand on Tuesday. Dmitry Peskov, Press Secretary of the President of the Russian Federation, said on Tuesday that Russia might use nuclear weapons if it was subject to a conventional missile assault supported by a nuclear power. The Russian Government’s message came as a response to Biden’s approval of the use of US missiles by Ukraine against Russia. Peskov also threatened that Biden’s approval of the use of rockets by Ukraine could lead to a third world war. 

The conflict between Israel and Hamas is also putting pressure on risk assets. The conflict in the Middle East, however, has been raging for over a year and markets are starting to ignore this risk.

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. Odds of another rate cut in December dropped to 60% this week from 90% the week before, putting pressure on crypto markets.

BTC/USD 1h Chart

ETH/USD 1h Chart

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Written by:
Myrsini Giannouli

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