Cryptocurrencies gain strength as tech stocks rise

Tech stocks rose on Thursday, boosted by positive Microsoft earning reports, which created a positive climate ahead of the release of Apple and Amazon earnings. Crypto markets also rose, supported by the rise in tech stocks. Crypto markets have been following the overall trends of stock markets and especially of tech stocks. 

Cryptocurrency prices are expected to remain volatile this week, as continued risk-aversion sentiment may drive their prices down. Bitcoin briefly climbed above the key $40,000 level on Thursday, before paring its gains. If Bitcoin price declines, it may find support at $37,500 and $36,000, while resistance may be found at $40,000 and further up near $48,200 and at the psychological level of $50,000. 

Ethereum price also rose on Thursday, trading above the $2,900 level. If ETH price declines, it may find support near $2,820 and further down at $2,440, while resistance may be encountered near $3,174.

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. Increasingly hawkish Fed rhetoric is pointing to a steep rate hike at the Fed’s next policy meeting in May, putting pressure on cryptocurrencies. 

Record-high inflation data in the US have increased the odds of a 50 base points increase in the Fed’s benchmark interest rate in May. On the other hand, investors are starting to use cryptocurrencies as a hedge against inflation, which could provide a boost to crypto markets, as inflation is expected to peak in the following months.

Continued Russian hostilities against Ukraine have increased risk-aversion sentiment, putting pressure on crypto markets. The situation between Russia and Ukraine continues to escalate, as Russian President Vladimir Putin makes threats about using nuclear weapons, while he cuts off the gas supply to Poland and Bulgaria. 

BTC/USD 1h Chart

ETH/USD 1h Chart

The content provided in this material and/or any other material that this content is referred to, whether it comes from a third party or not, is for information purposes only and shall not be considered as a recommendation and/or investment advice and/or investment research and/or suggestions for performing any actions with financial products or instruments, or to participate in any particular trading strategy and cannot guarantee any profits. Past performance does not constitute a reliable indicator of future results. TopFX does not represent that the material provided here is accurate, current, or complete and therefore shouldn't be relied upon as such. This material does not take into account the reader's financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of TopFX, no reproduction or redistribution of the information provided herein is permitted.

Written by:
Myrsini Giannouli

Share the article: