Cryptocurrencies volatile ahead of US inflation report

On Wednesday, Bitcoin and other major cryptocurrencies were volatile, as uncertainty over future Fed rate hikes affected market sentiment. 

Bitcoin price climbed to the $17,320 level on Wednesday but rallied soon afterward, climbing above $17,500. If the BTC price declines, support can be found near $16,370, while resistance may be encountered at $18,360. 

Ethereum price dropped as low as $1,320 on Wednesday, before bouncing back to $1,345. If Ethereum's price declines, it may encounter support near $1,180, while if it increases, resistance may be encountered near $1,350.

Even though inflation rates remain high, signs of cooling price pressures have reduced rate hike expectations recently, providing support for riskier assets. The Fed and other central banks are starting to scale back their aggressive rate hiking, raising hopes of a reversal in cryptocurrencies’ downfall. Many market participants believe that the cryptocurrency selloff is nearly over and that current low prices offer an investment opportunity.

Federal Reserve Chairman Jerome Powell stressed on Tuesday that the Fed will have to make tough decisions to bring US inflation down, but avoided commenting directly on the central bank’s monetary policy outlook, turning market attention to the US inflation report on Thursday. US inflation data are scheduled to be released on Thursday and are this week’s most highly anticipated fundamentals, as they may influence the Federal Reserve’s monetary policy.

BTC/USD 1h Chart

ETH/USD 1h Chart

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Written by:
Myrsini Giannouli

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