Cryptocurrencies rise but cannot maintain bullish momentum

Cryptocurrencies rose in early trading on Wednesday, but failed to gain bullish momentum and pared some of their gains later in the day. Uncertainty is dominating crypto markets preventing cryptocurrencies from forming a clear trend. 

Hawkish Fed minutes last week pointed to further rate hikes up ahead driving risk assets down as markets adjusted Fed rate hike expectations. The Fed might raise interest rates for longer than previously expected, putting pressure on crypto markets. The Federal Reserve raised interest rates by only 25 basis points at its February meeting, bringing the benchmark interest rate to a target range of 4.50% to 4.75%. 

Prolonged rate hikes fuel global recession concerns, driving risk assets down. US inflation data last week showed that price pressures in the US remain high and are not easing at the pace anticipated, weighing cryptocurrency prices down. Market expectations of the Fed peak interest rate continue to rise on hotter-than-expected US price pressures, putting pressure on crypto markets. Current market odds lean towards further tightening in the upcoming Fed meetings and an increase in interest rates up to 5.25%.

The bitcoin price touched $24,000 on Wednesday but retreated to $23,400 later in the day. If the BTC price declines, support can be found near $22,800, while resistance may be encountered near $24,600. 

Ethereum price also climbed on Wednesday, touching $1,660, but pared some of its gains later on. If Ethereum's price declines, it may encounter support near $1,560, while if it increases, resistance may be encountered near $1,680.

BTC/USD 1h Chart

ETH/USD 1h Chart

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Written by:
Myrsini Giannouli

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