Cryptocurrencies slip amid election uncertainty

Cryptocurrencies slipped on Monday amid US election uncertainty. The US mid-term Congressional elections will take place on Tuesday and their outcome may cause crypto market volatility. Concerns that the Democratic party might lose control of Congress in Tuesday’s elections, leading to political instability in the US, have pushed the dollar down.

In addition, Changpeng Zhao, the CEO of Binance, has stated that the exchange will liquidate all the FTT holdings in its books, triggering a cryptocurrency selloff.

Bitcoin price plummeted from $21,200 to $20,600 on Monday. If BTC declines, support can be found at the psychological level of $20,000 and further down at $18,200, while resistance may be encountered near $21,000. 

Ethereum price was volatile on Monday, fluctuating around the $1,580 level. If Ethereum's price declines, it may encounter support at $1,480 and further down at $1,190, while if it increases, resistance may be encountered near $1,660 and further up at $1,780.

Cryptocurrency prices are pushed down by continuous rate hikes. As central banks raise their interest rates, moving towards an increasingly hawkish fiscal policy, recession fears grow, reducing risk appetite. The US Federal Reserve hiked its interest rate by 75 basis points at its monetary policy meeting last week. The Fed has so far increased interest rates by a total of 375 basis points this year, bringing its benchmark interest rate to 4.0%. 

It is uncertain, however, whether the Fed can continue its aggressively hawkish policy. Market expectations are currently in favor of a 50-bps rate hike in December and a 25-bps hike in January. Rate hikes are expected to taper off in 2023 as the central bank moves into a stable interest rate.

BTC/USD 1h Chart

ETH/USD 1h Chart

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Written by:
Myrsini Giannouli

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