CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please consider our Risk Disclosure Notice and ensure that you fully understand the risks involved. CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please consider our Risk Disclosure Notice and ensure that you fully understand the risks involved.

This week in Crypto: prices pull back ahead of central bank decisions

Crypto assets are put in a world-beating return ahead of central bank meetings.

The run-up in Crypto assets has taken a pause, ahead of major central bank meetings this week. In this week’s Crypto Verse, we look at what could drive crypto assets in the week ahead and dive into the charts of Bitcoin, Ether, and the Crypto 10 Index.

Sentiment cools ahead of central bank decisions

Crypto prices have pulled back this week, as investors steel themselves for a batch of central bank policy decisions.

The European Central Bank, the Bank of England, and (most importantly) the US Federal Reserve will meet at the end of the week, with all three expected to raise interest rates. The US Federal Reserve is tipped to lift the Federal Funds Rate by 25 basis points to 4.75%, with the central bank’s guidance regarding its path forward for policy the key issue for market participants.

Source: Bank of England, St. Louis Fed

So far in 2023, crypto has been the best-performing asset class, according to research released by Goldman Sachs last week. With several days left in the month of January, Bitcoin had added 27% to its price YTD, with a risk-adjusted return of 3.1%.

To this point, this outstrips the risk-adjusted return of other risk assets like high-yield credit and emerging market equities.

Source: Goldman Sachs

Three cryptos to watch

  • Bitcoin

Bitcoin prices have consolidated in recent days, as upward momentum moderates. There’s a bearish divergence between price and the daily RSI, suggesting that the crypto’s short-term uptrend could reverse. Support currently appears to be around $22,700 while sellers have emerged around $24,000 in this recent rally.

Bitcoin daily chart

Source: IG
  • Ether

Ether's price action is showing a similar loss of upside momentum. The daily RSI has fallen from overbought territory, signalling a possible pullback. Price action points to consolidation however, the first level of support appears to be around the 20-day moving average, with $1500 a key level of support and resistance. On the upside, $US1650 looms as technical resistance.

Ether daily chart

Source: IG
  • Crypto 10 Index

The Crypto 10 Index is also signally a loss of momentum. The daily RSI is diverging with price and suggesting a possible pullback. 7131 is the key level to watch on the downside in the short term.

Crypto 10 Index daily chart

Source: IG

The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer.

Start trading forex today

Find opportunity on the world’s most-traded – and most-volatile – financial market

  • Trade spreads from just 0.6 points on EUR/USD
  • Analyse with clear, fast charts
  • Speculate wherever you are with our intuitive mobile apps

See an FX opportunity?

Try a risk-free trade in your demo account, and see whether you’re onto something.

  • Log in to your demo
  • Take your position
  • See whether your hunch pays off

See an FX opportunity?

Don’t miss your chance – upgrade to a live account to take advantage.

  • Get spreads from just 0.6 points on popular pairs
  • Analyse and deal seamlessly on fast, intuitive charts
  • See and react to breaking news in-platform

See an FX opportunity?

Don’t miss your chance. Log in to take your position.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.