Bitcoin and Ethereum claim important levels as crypto rally resumes – Cryptocurrency News
April 14, 2023 11:27 am
Undoubtedly, cryptocurrencies have had a vibrant start to the year, outperforming against all major asset classes and revisiting multi-month highs. Besides the improving macroeconomic backdrop, digital coins also benefited from the banking crisis, while fundamental improvements within the sector acted as an additional tailwind. However, as systemic and regulatory woes continue to rattle the sector, investors should not rule out a potential downside correction.
Cryptos extend their Q1 outperformance
During this week, Bitcoin and crypto markets in general have realised significant gains, which are mainly driven by changes in the macroeconomic picture. On Wednesday, Bitcoin price surpassed the crucial $30,000 psychological mark for the first time since June 2022 on the back of the softer than expected US CPI print.
The rally observed in digital assets since the start of the year has been largely attributed to expectations of a more accommodative policy by the Fed, thus any data point tilting towards that direction will be welcomed by cryptocurrency bulls. Furthermore, looser monetary policy in the US translates into a softer greenback, which in turn positively affects crypto prices.
Another substantial factor behind the latest developments in crypto space was the turmoil in the US banking sector, following the collapse of three regional banks. This turbulence did not only lead to a downshift in interest rate projections but also transferred funds towards digital coins.
Even though a barrage of failures in the crypto world has undermined the security and safety of digital deposits, investors seem to still have trust in the decentralised features of cryptocurrencies. Consequently, major US banks’ earnings that start on Friday could trigger some volatility, especially if we get any big surprises.
Shanghai upgrade sends Ethereum to fresh 11-month high
Although since the beginning of the year most attention fell on Bitcoin’s rally, Ethereum has stolen the limelight in the past couple of days. On Wednesday, Ethereum successfully completed the Shanghai upgrade, transitioning to a proof-of-stake network. This development essentially allows Ethereum holders to stake tokens without locking them, thus increasing liquidity as investors will not have to commit to prolonged periods in which they won’t be able to snatch short-term opportunities.
Although it was initially feared that this excess liquidity stemming from the unlocking of staked tokens would ignite selling pressures, Ethereum rallied hard as investors perceived the software upgrade as positive news. Specifically, the second largest cryptocurrency by market capitalization stormed to a fresh 11-month high of 2,130 on Friday, also dragging the broader crypto space higher.
Key levels for Ethereum
Taking a technical look, Ethereum has been posting a series of fresh higher highs in the last few days, while also jumping above the $2,000 psychological mark. The question that lies ahead though is whether it will face a pullback due to reaching overbought conditions.
If the price manages to break above its recent peak, the focus will turn to two previous support zones, initially the January 2022 low of $2,160 could provide support before the February 2022 bottom of $2,300 gets tested.
On the flipside, bearish actions may send the price to challenge the August 2022 peak of $2,030. Even lower, the $1,770 support could provide downside protection.
Undoubtedly, cryptocurrencies have had a vibrant start to the year, outperforming against all major asset classes and revisiting multi-month highs. Besides the improving macroeconomic backdrop, digital coins also benefited from the banking crisis, while fundamental improvements within the sector acted as an additional tailwind. However, as systemic and regulatory woes continue to rattle the sector, investors should not rule out a potential downside correction.
Cryptos extend their Q1 outperformance
During this week, Bitcoin and crypto markets in general have realised significant gains, which are mainly driven by changes in the macroeconomic picture. On Wednesday, Bitcoin price surpassed the crucial $30,000 psychological mark for the first time since June 2022 on the back of the softer than expected US CPI print.
The rally observed in digital assets since the start of the year has been largely attributed to expectations of a more accommodative policy by the Fed, thus any data point tilting towards that direction will be welcomed by cryptocurrency bulls. Furthermore, looser monetary policy in the US translates into a softer greenback, which in turn positively affects crypto prices.
Another substantial factor behind the latest developments in crypto space was the turmoil in the US banking sector, following the collapse of three regional banks. This turbulence did not only lead to a downshift in interest rate projections but also transferred funds towards digital coins.
Even though a barrage of failures in the crypto world has undermined the security and safety of digital deposits, investors seem to still have trust in the decentralised features of cryptocurrencies. Consequently, major US banks’ earnings that start on Friday could trigger some volatility, especially if we get any big surprises.
Shanghai upgrade sends Ethereum to fresh 11-month high
Although since the beginning of the year most attention fell on Bitcoin’s rally, Ethereum has stolen the limelight in the past couple of days. On Wednesday, Ethereum successfully completed the Shanghai upgrade, transitioning to a proof-of-stake network. This development essentially allows Ethereum holders to stake tokens without locking them, thus increasing liquidity as investors will not have to commit to prolonged periods in which they won’t be able to snatch short-term opportunities.
Although it was initially feared that this excess liquidity stemming from the unlocking of staked tokens would ignite selling pressures, Ethereum rallied hard as investors perceived the software upgrade as positive news. Specifically, the second largest cryptocurrency by market capitalization stormed to a fresh 11-month high of 2,130 on Friday, also dragging the broader crypto space higher.
Key levels for Ethereum
Taking a technical look, Ethereum has been posting a series of fresh higher highs in the last few days, while also jumping above the $2,000 psychological mark. The question that lies ahead though is whether it will face a pullback due to reaching overbought conditions.
If the price manages to break above its recent peak, the focus will turn to two previous support zones, initially the January 2022 low of $2,160 could provide support before the February 2022 bottom of $2,300 gets tested.
On the flipside, bearish actions may send the price to challenge the August 2022 peak of $2,030. Even lower, the $1,770 support could provide downside protection.
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