Cryptocurrencies lose bullish momentum as bears fight back

Cryptocurrency prices were volatile on Monday, following stock market volatility. Risk appetite was renewed on Monday, with safe-haven assets retreating in favor of riskier assets. This trend did not extend to crypto markets though, which retreated on Monday.

Cryptocurrency bulls have been fighting to regain some of the lost ground, but bearish trends prevailed on Monday, driving major cryptocurrencies down.

Global recession fears are promoting a risk-aversion sentiment putting pressure on cryptocurrency prices. An increasing number of major Central Banks are moving towards a tighter fiscal policy, fuelling concerns of a shrinking economic outlook. The Bank of Canada recently hiked its interest rate by 100 base points and the ECB unexpectedly raised interest rates by 50 bps last week. The BOE is also moving in a more hawkish direction, reportedly considering a rate hike of up to 50 bps in August. 

The Fed is expected to raise its interest rates again considerably this week to tackle skyrocketing US inflation. The outcome of the much-anticipated Fed meeting on the 27th is expected to affect cryptocurrency prices, with the odds in favor of a 75 bps Fed rate hike. 

Bitcoin price retreated below the $22,000 key level on Monday. If Bitcoin price declines, support may be found at the $19,200 level and further down at the psychological level of $15,000, while resistance may be found near $31,500. 

Ethereum plummeted on Monday, dropping below the $1,500 level. If Ethereum's price declines, it may encounter support at the $1000 level, representing its lowest price since January 2021 and further down at the psychological level of $500, while resistance may be encountered at $2.000.

Ethereum price skyrocketed last week, following an announcement from the Ethereum Foundation that the much-anticipated ‘merge’ was set to launch on September 19th. The Merge from the Proof-of-Work to the Proof-of-Stake method will be a significant network upgrade that is expected to lead to an increase in demand for Ethereum, boosting its price. Ethereum price lost its upwards momentum though, and the bears sank the cryptocurrency on Monday.

BTC/USD 1h Chart

ETH/USD 1h Chart

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Written by:
Myrsini Giannouli

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