Cryptocurrencies surge as Fed pauses interest rates

Cryptocurrency prices surged on Wednesday after the Fed announced that it would pause interest rates. Increases in central banks’ interest rates are putting pressure on risk assets. The Fed’s decision to pause rate hikes increased risk appetite, boosting cryptocurrencies.

FOMC members voted to keep interest rates unchanged at a 22-year high within a target range of 5.25% to 5.50%. A pause in rate hikes was widely anticipated, however, and had already been priced in by markets, and the effect on gold prices was muted. 

Fed Chair Jerome Powell’s speech after the conclusion of the meeting had hawkish undertones, warning that another rate hike in December is not out of the table. The Fed’s approach remains largely data-driven and will depend on how fast inflationary pressures may ease in the next months. 

Bitcoin price skyrocketed on Wednesday, climbing above the key $35,000 level. If BTC price declines, support can be found near $33,400, while resistance may be encountered near $36,000. 

Ethereum also surged on Wednesday, testing the 1,860-level resistance. If Ethereum's price declines, it may encounter support near $1,750, while if it increases, further resistance may be encountered near $1,900.

Crypto markets are under pressure, however, as geopolitical events sour risk sentiment. The war between Israel and Hamas is driving cryptocurrency prices down. The conflict rages on in the Gaza area, causing market turmoil. 

Bitcoin price surged early last week on news that the iShares Bitcoin Trust had been listed on the Depositary Trust & Clearing Corporation, which clears Nasdaq trades. Bitcoin’s rally was halted later in the week, but BTC price remained strong as markets anticipate a Bitcoin ETF launch soon.

BTC/USD 1h Chart

ETH/USD 1h Chart

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Written by:
Myrsini Giannouli

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