Bitcoin drops below $66,000

Bitcoin price dipped below the key $66,000 level on Tuesday. If BTC price declines, support can be found at $63,500, while resistance may be encountered at $70,000. 

Ethereum price also declined on Tuesday, dropping below $3,300. If Ethereum's price declines, it may encounter support near $3,080, while if it increases, resistance may be encountered near $3,560.

Former US President Donald Trump spoke in favor of Bitcoin at a conference in Nashville on Saturday, vowing to create a government stockpile if he wins the US presidential election. Trump’s support boosted Bitcoin price on Monday, but the cryptocurrency deflated sharply after touching the $70,000 level as many traders realized their gains. 

The US Securities and Exchange Commission (SEC) recently approved Ethereum spot exchange-traded funds (ETFs), propping up the cryptocurrency. The rally of Ethereum was short-lived, however. After an impressive opening on the first day, the performance of ETH spot ETFs has been underwhelming.

Fluctuating risk sentiment is causing volatility in crypto markets. 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. The US Federal Reserve kept interest rates unchanged at its latest policy meeting, within a target range of 5.25% to 5.50%, as expected. 

Rate cut expectations in September are currently above 90%, providing support for risk assets. The uncertainty around Fed rate expectations is likely to continue in the coming months causing volatility in crypto markets. 

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. A rocket strike by Hezbollah in the Israeli-occupied Golan Heights over the weekend raised concerns of an all-out war in the region, putting pressure on cryptocurrencies.

BTC/USD 1h Chart

ETH/USD 1h Chart

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Written by:
Myrsini Giannouli

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