Bitcoin struggles to overcome $52K barrier

Most major cryptocurrencies have been on a bullish trend for the past couple of weeks. Bitcoin has crossed major resistance levels, as bulls are prevailing, reaching its highest level since December 2021. 

Bitcoin traded sideways on Thursday, testing the key $52,000 level resistance but not managing to overcome this barrier and dropping back to the $51,600 level. Bitcoin price soared earlier in the week, touching the $53,000 level, but could not maintain a bullish trend as bears fought back. If the BTC price declines, support can be found at $50,600, while further resistance may be encountered near $52,000 again and further up near $53,000. 

Ethereum price edged higher on Thursday, touching the $3,000 level. If Ethereum's price declines, it may encounter support near $2,700; if it increases, resistance may be near $3,030.

Bitcoin is gaining strength as the Bitcoin halving event is approaching. Every halving event cuts the rate at which new bitcoins are released into circulation in half, increasing the scarcity value of Bitcoin. The halving is scheduled approximately every four years, and the next Bitcoin halving event is expected on April 17th raising the value of the cryptocurrency.

The approval of Bitcoin spot exchange-traded funds (ETFs) by the Securities and Exchange Commission (SEC) caused cryptocurrency prices to surge over the past few weeks. The SEC finally approved 11 applications boosting Bitcoin price. 

Cryptocurrency prices are affected by central banks’ interest rates. High-interest rates are putting pressure on risk assets, while the promise of rate cuts boosts crypto markets. The Fed kept interest rates unchanged at its latest meeting, within a target range of 5.25% to 5.50%. The Fed, however, has removed the tightening bias from its policy statement, indicating that the central bank is preparing to pivot to a less restrictive monetary policy. 

Markets are under pressure by increased risk-aversion sentiment caused by rising geopolitical tensions. Concerns that the Geopolitical crisis in the Gaza area may spread to neighboring countries drive risk sentiment down putting pressure on risk assets. The US and the UK have launched a coordinated action against Houthi rebels in Yemen. Over the weekend, an Israeli war cabinet member warned that unless Hamas freed all hostages held in Gaza by the start of Ramadan on March 10th, Israel would invade Gaza's city of Rafah.

BTC/USD 1h Chart

ETH/USD 1h Chart

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Written by:
Myrsini Giannouli

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