Cryptocurrencies climb after Fed rate announcement

In a highly-anticipated meeting on Wednesday, the Federal Reserve raised its benchmark interest rate by 25 base points, bringing its benchmark interest rate to 0.50%. In the ensuing press conference, Federal Reserve Chairman Jerome Powell signaled that the Fed’s interest rates could reach nearly 2% by the end of the year. The BOE is also expected to announce a rate hike after its meeting on Thursday. The shift towards a more hawkish fiscal policy has been putting pressure on cryptocurrencies over the past few months. 

After the announcement of the Fed rate hike, however, cryptocurrency prices climbed, as the interest rate raise fell within market expectations and was already priced in by markets. Bitcoin climbed above the $40,000 psychological level, reaching $41,000. If Bitcoin price falls, it may find support at $36,000 and $33,000, while resistance may be found at $40,000 and further up near $44,300. Ethereum price also went up, climbing above $2,700. Ethereum may find support at $2,600 and further down around $2,300. In case its price goes up, it may find resistance at $3,000 and further up at $3,400.

Cryptos have been under pressure since the beginning of the year, hit by a bout of risk-aversion. Mounting geopolitical tensions have been driving the price of cryptos down, as investors shy away from risk assets. This week, however, diplomatic talks between Russia and Ukraine have sparked hope of a de-escalation of the crisis. In addition, most major cryptocurrencies have received a boost over the past couple of weeks, as demand from Russian and Ukrainian markets increased. Bitcoin volume from Russian markets has increased considerably, as Russian investors aim to escape the plummeting Rouble and Russian sanctions.

BTC/USD 1h Chart

ETH/USD 1h Chart

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Written by:
Myrsini Giannouli

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