Cryptocurrency prices edge lower on global recession fears

Crypto markets plummeted on Monday, on renewed risk-aversion sentiment. Stock markets retreated on Monday, as global recession concerns intensified, pushing crypto markets down. Cryptocurrency prices have been following stock market trends and the recent pressure on stocks has been transferred to cryptos.

Bitcoin price retreated on Monday falling below the key $20,000 level late in the day. If the 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 $21,800 and $23,000. 

Ethereum price also fell on Monday, falling below $1,100. If Ethereum's price continues to decline, 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 $1,280 and higher up at $2.000.

A steep cryptocurrency selloff was triggered in the beginning of June, as bearish tendencies have prevailed in crypto markets, with mounting layoffs in crypto firms and huge losses in trading volumes. Bitcoin and Ethereum have suffered heavy losses, plummeting to prices that haven’t been seen since the beginning of 2021.

Global recession fears are promoting a risk-aversion sentiment, pushing cryptocurrency prices down. An increasing number of major Central Banks are moving towards a tighter fiscal policy in order to tame soaring inflation rates. The Fed has been signaling a strong rate hike again this month, which is also supported by signs of economic recovery in the US. Another rate hike of 75 base points is expected for July and is already been priced in by markets, catapulting the dollar to record highs and pushing cryptocurrency prices down. Stalling economic growth combined with fiscal tightening gives rise to fears of recession, promoting a risk-aversion sentiment and putting pressure on cryptocurrencies.

On the other hand, many market participants are seeking opportunities to buy cryptocurrencies at low prices, in the expectation that they have reached the bottom. Bitcoin whales are buying the dip for major cryptocurrencies, preventing crypto markets from crashing completely. 

BTC/USD 1h Chart

ETH/USD 1h Chart

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Written by:
Myrsini Giannouli

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