Bitcoin dips as US markets remain closed

Bitcoin price surged last week, reaching $99,500 for the first time in history and flirting with the $100,000 milestone. Bitcoin price dropped to $95,000 on Thursday, however, as markets were slow on the US holiday. If the BTC price declines, support can be found at $85,000, while resistance may be encountered at the psychological level of $90,000. 

Ethereum price also weakened on Thursday, dropping to $3,560. If Ethereum's price declines, it may encounter support near $3,250, while if it increases, resistance may be encountered near $3,700.

Thursday was a bank holiday in the US in observance of Thanksgiving Day. Cryptocurrencies traded with thin volumes on Thursday as US markets remained closed. This Friday is Black Friday for the US and low liquidity is also expected on Friday.

Bitcoin had been riding the Trump trade flirting with the key $100,000 level last week. Bitcoin price slumped on Monday, however, and continued to decline on Tuesday. Bitcoin was just shy of reaching the $100,000 milestone last week and many traders rushed to realize their gains after Bitcoin’s rally was halted over the weekend. A risk-on sentiment prevailed on Wednesday, however, providing support for crypto markets. 

Geopolitical concerns are promoting a risk aversion sentiment, lowering the appeal of high-risk assets such as cryptocurrencies. Geopolitical tensions cooled on Wednesday, however, leading to a rise in risk sentiment. A 60-day ceasefire between Israel and Lebanon was officially declared on Wednesday. The deal will hopefully lead to discussions of a peace treaty and the deal will hopefully put an end to the 14-month conflict and has the potential to restore stability in the Middle East. Tensions between Russia and Ukraine also eased this week, boosting crypto markets. 

Crypto markets have been gaining strength since Donald Trump’s victory in the US Presidential elections. 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. In addition, Trump’s proposed tariffs and tax policies are expected to support economic growth, boosting high-risk assets, such as cryptocurrencies.

Concerns over Trump’s proposed tariffs, however, dampened risk sentiment on Tuesday. President-elect Donald Trump communicated more tariff measures on his social media. Trump stated that his administration would impose an additional 25% tariff on imports from Canada and Mexico, with an additional 10% to the 60% already announced during his election campaign on Chinese goods. 

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. Market odds of a December rate cut rose to approximately 70% this week, providing support for cryptocurrencies. 

BTC/USD 1h Chart

ETH/USD 1h Chart

TRADE CRYPTO

The content provided in this material and/or any other material that this content is referred to, whether it comes from a third party or not, is for information purposes only and shall not be considered as a recommendation and/or investment advice and/or investment research and/or suggestions for performing any actions with financial products or instruments, or to participate in any particular trading strategy and cannot guarantee any profits. Past performance does not constitute a reliable indicator of future results. TopFX does not represent that the material provided here is accurate, current, or complete and therefore shouldn't be relied upon as such. This material does not take into account the reader's financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of TopFX, no reproduction or redistribution of the information provided herein is permitted.

Written by:
Myrsini Giannouli

Share the article: