Improved risk sentiment boosts Cryptocurrencies

Global developments are causing fluctuations in risk sentiment, creating crypto market volatility. Stock markets and crypto markets have been experiencing a roller coaster ride, with prices seesawing, as risk sentiment turns from positive to negative almost daily. In Japan, currency interventions are causing market turmoil, with the Yen seesawing wildly. 

Improved risk sentiment pushed the safe-haven dollar down on Tuesday, benefitting stock markets and crypto markets. The announcement of the appointment of Rishi Sunak as the UK’s next PM brought a measure of stability to the UK, after the political upheaval of the past few months. 

Bitcoin price broke through the $19,800 level resistance on Tuesday, rising sharply and surpassing the key $20,000 level. If BTC declines, support can be found at the psychological level of $19,000 and further down at $18,200, while resistance may be encountered near $20,500. 

Ethereum price climbed above the $1,400 level resistance on Tuesday, touching $1,500 before paring some of its gains. If Ethereum's price declines, it may encounter support at $1,260 and further down at $1,190, while if it increases, resistance may be encountered near $1,500.

Inflation remains high in some of the world’s leading economies forcing Central Banks to tighten their monetary policies. Eurozone inflation cooled slightly in September dropping to 9.9% year-to-year, while UK inflation climbed back to 40-year highs of 10.1%. US annual inflation reached 8.2% in September, putting pressure on the Fed to continue raising interest rates. The Federal Reserve will likely continue its hawkish run, with a 75-bps rate hike expected at the next policy meeting in November. Continuous rate hikes, however, risk tipping the countries’ economies into recession.

This week, the ECB monetary policy meeting on the 27th and the BOJ policy meeting on the 28th is expected to cause market volatility that will likely extend to crypto markets as well. 

BTC/USD 1h Chart

ETH/USD 1h Chart

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Written by:
Myrsini Giannouli

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