Bitcoin struggles to hold on to $20,000 after a crypto selloff

Cryptocurrency prices plummeted last week, as global recession concerns drove riskier assets down. On Monday, global stocks rose marginally and crypto markets edged higher.

A steep cryptocurrency selloff was triggered last week, as bearish tendencies have prevailed in crypto markets. The crypto industry has been under pressure since the beginning of the year and the results are becoming apparent, with mounting layoffs in crypto firms and huge losses in trading volumes.

Bitcoin traded sideways along with the $20,000 level on Monday, after falling below this key level during the weekend for the first time in over two years. If Bitcoin price continues to fall, support may be found at $19,200 and further down at the psychological level of $15,000, while resistance may be found near $32,300 and at $40,000. 

Ethereum price also plummeted in the past week and it is currently trading just above the support at the psychological level of $1,000. If the Ethereum price continues to decline, further support may be found near the psychological level of $500, while resistance may be encountered at $2,000 and higher up to $2.170.

The shift of major central banks towards a more hawkish fiscal policy has been putting pressure on cryptocurrencies. Most major Central Banks are turning towards a tighter policy and a return to pre-pandemic interest rates, driving cryptocurrency prices down. Last week, the US Federal Reserve voted to raise its benchmark interest rate by 75 points and the BOE by 25 base points, putting pressure on cryptocurrencies. 

Market sentiment has been fragile during the past couple of weeks, causing volatility in stock markets and cryptocurrencies alike. Crypto markets have been known to follow the overall trends of stock markets and especially of tech stocks. In addition, a strong risk-off sentiment has prevailed since the beginning of the year due to geopolitical tensions, driving investors to safer assets and dampening the appeal of cryptocurrencies.

BTC/USD 1h Chart

ETH/USD 1h Chart

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Written by:
Myrsini Giannouli

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