Cryptocurrencies soar on improved risk sentiment

Bitcoin and other major cryptocurrencies gained strength on Thursday, on improved risk sentiment. Crypto markets and stock markets surged on Thursday, as soft US inflation helped to scale back recession concerns, improving risk sentiment.

The highly-anticipated US inflation report on Thursday showed that US inflation seems to be cooling, which may give the US Federal Reserve some leeway toward scaling back its interest rate increases. US headline inflation dropped to 6.5% year-on-year in December from 7.1% in November. 

Even though inflation rates remain high, cooling price pressures have reduced rate hike expectations, providing support for riskier assets. The Fed and other central banks are starting to scale back their aggressive rate hiking, raising hopes of a reversal in cryptocurrencies’ downfall. Many market participants believe that the cryptocurrency selloff is nearly over and that current low prices offer an investment opportunity.

Bitcoin price was catapulted above the $18,360 resistance level on Thursday, touching $19,000. If the BTC price declines, support can be found near $16,370, while resistance may be encountered at $20,000. 

Ethereum price climbed above the $1,350 resistance on Thursday, reaching $1,430. If Ethereum's price declines, it may encounter support near $1,180, while if it increases, resistance may be encountered near $1,670.

BTC/USD 1h Chart

ETH/USD 1h Chart

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Written by:
Myrsini Giannouli

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