Cryptocurrencies volatile amid market turbulence

Most major cryptocurrency prices exhibited high volatility on Tuesday amid overall market turbulence. Cryptocurrency prices rose sharply early on Tuesday but plummeted later in the day paring their gains. Stock markets also climbed in early trading but later reversed their gains, dragging down cryptocurrencies, which followed stock market trends on Tuesday. 

The US Fed raised its interest rate by 75 basis points last week, driving down crypto markets. Steep rate hikes increase global recession concerns, putting pressure on risk assets, such as cryptocurrencies. The Fed’s rate hike was largely expected and had already been priced in by markets. Cryptocurrencies have been retreating for the past couple of weeks in expectations of a hawkish Fed outcome and so the effect of the rate hike was somewhat muted. The EU, the UK, Switzerland, and Canada have also tightened their monetary policies recently. 

Bitcoin briefly touched the key $20,000 level early on Tuesday but dropped below moving below $19,000 later in the day. If BTC declines further, support can be found at $17,600, while resistance may be encountered near $19,700. 

Ethereum price also rose sharply early on Tuesday, almost touching $1,400 but dropped down to the $1,300 level later in the day. If Ethereum's price declines, it may encounter support at the psychological level of $1,000. If the Ethereum price increases, resistance may be encountered near $1,407.

Ethereum price had been boosted in anticipation of the merge from the Proof-of-Work to the Proof-of-Stake method. The hype created around the merger had created a bullish sentiment for the cryptocurrency, which deflated following its completion, triggering a selloff.

BTC/USD 1h Chart

ETH/USD 1h Chart

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Written by:
Myrsini Giannouli

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