Bitcoin reclaims $70,000 as bulls prevail

A bullish trend prevailed in crypto markets on Tuesday and Bitcoin price was catapulted above the key $70,000 level. If BTC price declines, support can be found at $66,700, while further resistance may be encountered at $72,000. 

Ethereum price also surged on Tuesday, rising to the $3,820 level. If Ethereum's price declines, it may encounter support at $3,700, while if it increases, resistance may be encountered near $4,000.

Signs that US economic growth is slowing down put pressure on crypto markets on Monday. The US Manufacturing sector is showing signs of contraction according to PMI data released on Monday.

Cryptocurrency prices are 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. Renewed Fed rate cut expectations are boosting crypto markets this week as US inflation showed signs of easing last week. 

The US Federal Reserve kept interest rates unchanged at its latest policy meeting within a target range of 5.25% to 5.50%. The Fed’s forward guidance was hawkish, indicating that interest rates will remain at high levels for longer. Odds of rate cuts are becoming more moderate, putting pressure on crypto markets, as policymakers have stated that they do not intend to start reducing interest rates until there is more evidence of disinflation. Odds of a rate cut in September rose above 60% this week, however, as US inflation showed signs of cooling last week. 

Crypto markets have been under pressure by the war in Gaza. Fears that the war will spread in the Middle East are promoting a risk aversion sentiment putting pressure on risk assets such as cryptocurrencies. 

BTC/USD 1h Chart

ETH/USD 1h Chart

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Written by:
Myrsini Giannouli

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