Cryptocurrencies rally as bulls fight back

Cryptocurrency prices rallied on Tuesday, following rising stock markets. Stock markets affect cryptocurrency prices, as crypto markets have been following stock market trends and especially those of tech stocks. Risk sentiment has been uncertain in the past few weeks, affecting crypto markets and stock markets alike. On Tuesday, positive earnings reports drove stock markets up, boosting cryptocurrency prices. 

Cryptocurrency bulls are finally regaining some of the lost ground, with many traders optimistic that the bear market may be finally over. The total market capitalization of cryptocurrency has returned to levels above $1 trillion, after remaining below this key level for approximately a month.

Bitcoin price moved past the $23,000 resistance level on Tuesday, climbing to $23,600. If Bitcoin price declines, support may be found at the $19,200 level and further down at the psychological level of $15,000, while further resistance may be found near $31,500. 

Ethereum rose less on Tuesday, after spiking during the weekend, remaining firm above the $1,500 level. If Ethereum price declines, it may encounter support at the $1000 level, representing its lowest price since January 2021 and further down at the psychological level of $500, while resistance may be encountered at $1,280 and higher up at $2.000.

Ethereum price skyrocketed during the weekend, following an announcement from the Ethereum Foundation that the much-anticipated ‘merge’ was set to launch on September 19th. The Merge from the Proof-of-Work to the Proof-of-Stake method will be a significant network upgrade that is expected to lead to an increase in demand for Ethereum.

Global recession fears are promoting a risk-aversion sentiment pushing cryptocurrency prices down. An increasing number of major Central Banks are moving towards a tighter fiscal policy to tame soaring inflation rates. A Fed rate hike of at least 75 bps this month is priced in by markets, putting pressure on crypto markets. Other major Central Banks are also tightening their monetary policy, with the ECB expected to raise its interest rate by at least 25 bps this week. 

On the other hand, many market participants are seeking opportunities to buy cryptocurrencies at low prices, with the expectation that they have reached the bottom. Bitcoin whales are buying the dip for major cryptocurrencies, preventing crypto markets from crashing completely. 

BTC/USD 1h Chart

ETH/USD 1h Chart

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Written by:
Myrsini Giannouli

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