Cryptocurrencies volatile on economic uncertainty

Crypto markets have been volatile in the past few days. Cryptocurrency prices plummeted overnight on Wednesday but regained strength on Thursday. Economic uncertainty is causing volatility in stock markets and crypto markets. 

The recent banking crisis has undermined trust in the banking system, raising the appeal of investing in less conventional assets, such as cryptocurrencies. Many investors have turned towards cryptocurrencies fearing a globalised meltdown in the banking system. However, renewal concerns about a banking sector meltdown have caused turbulence in crypto markets. First Republic Bank announced on Tuesday that its deposits fell 40% in the first quarter of this year. On Wednesday, First Republic stocks went into freefall. 

Increased rate hike expectations put pressure on cryptocurrency prices. The Federal Reserve raised interest rates by only 25 basis points at its meeting in March, bringing the benchmark interest rate to a target range of 4.75% to 5.00%. Market odds currently favor another 25-basis point rate hike at the Fed’s next meeting in May. 

Bitcoin price rallied on Thursday after plummeting on Wednesday, touching $29,800. If the BTC price declines, support can be found near $27,000, while resistance may be encountered near $30,000. 

Ethereum price also went up on Thursday, reclaiming the $1,940 level. If Ethereum's price declines, it may encounter support near $1,760; if it increases, resistance may be encountered at $2,000.

Ethereum price went up in the past few weeks, as the highly-anticipated Shanghai upgrade took place on April 12th without incident. This upgrade allows Ethereum network validators to withdraw their staked Ethereum from the blockchain network, effectively completing its transition to a proof of stake model. 

BTC/USD 1h Chart

ETH/USD 1h Chart

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Written by:
Myrsini Giannouli

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