Bitcoin skyrockets to $72,000 then dips

Bitcoin price exhibited high volatility on Tuesday, rising to the $72,000 level and then dipping below the key $70,000 level. If BTC price declines, support can be found at $61,000, while further resistance may be encountered at the all-time high of $73,800. 

Ethereum price continued to rise on Tuesday, touching the $3,800 level. If Ethereum's price declines, it may encounter support at $2,800, while if it increases, resistance may be encountered near $4,080.

A bullish trend prevailed in crypto markets this week after a surge in spot BTC exchange-traded fund (ETF) purchasing. Spot Bitcoin ETF demand has been on the rise, boosting the crypto markets as well.

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 rate cut expectations boosted cryptocurrency prices after the release of the US inflation report last week. Inflationary pressures in the US are easing, which may allow the US Federal Reserve to start cutting interest rates by September. 

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.

Crypto markets have been under pressure by the escalation of hostilities between Israel and Iran. Fears that the war will spread in the Middle East are promoting a risk aversion sentiment putting pressure on risk assets such as cryptocurrencies.  

Bitcoin recently reached a new all-time high of $73,800. Bitcoin underwent ‘halving’ last month. Every halving event cuts the rate at which new bitcoins are released into circulation in half, increasing the scarcity value of Bitcoin. This was the fourth halving event in the history of Bitcoin and markets have been anticipating the event for some time. The Bitcoin halving event, however, had already been priced in and Bitcoin price has been dropping since. 

BTC/USD 1h Chart

ETH/USD 1h Chart

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Written by:
Myrsini Giannouli

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