Crypto-versed: prices break out as market sentiment turns bullish
Crypto prices have broken out as sentiment in global markets turns bullish.
Crypto prices have broken out as sentiment in global markets turns bullish. In this week’s Crypto Verse, we review the week that was in the crypto world and check in on the charts of Bitcoin, Ethereum, and the Crypto 10 Index.
Sentiment improves as US inflation drops
Market sentiment has improved globally, pushing money flow into crypto assets. The bullishness has been stoked primarily by softening US inflationary pressures, along with the growth tailwinds provided by a re-opening Chinese economy.
The latest US CPI release revealed headline inflation dropped to 6.5% in December, with the data prompting traders to price in that the US Federal Reserve will step down the size of its rate increases to 25 basis points.
Market participants are also broadly discounting rate cuts from the Fed before year-end, with the euro dollar futures curve implying the Fed’s key rate could finish 2023 around 4.65%.
The paring back of expectations of futures Fed hikes has simultaneously lowered US Treasury yields and weakened the US dollar, pushing Bitcoin (and other crypto prices) higher.
Bitcoin has surged and is trading above where it was prior to the FTX collapse. Price has broken through resistance around $US17,500 and $US18,500, and it currently challenging resistance at $IS21,500.
The daily RSI is very overbought and signalling a loss of upside momentum. The 200-day moving average, which Bitcoin is now trading above, could act as future support.
Bitcoin daily chart
Ether has broken out and pushed above key resistance at $1350. Price is above the 200-day MA now but the daily RSI is overbought and pointing to slowing upside momentum. The first level of support appears around $US1500, with the next major level to the upside around $1630.
Ethereum daily cahrt
Crypto 10 Index
The Crypto 10 Index’s price action is very bullish as it shows signs of reversing its downtrend. Price is above all key moving averages, with the first levels of support and resistance at 6860 and 7130.
Crypto 10 Index daily chart
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