Crypto Markets Show Volatility; Bitcoin and Ethereum’s Key Role
cryptocurrency markets are experiencing volatility amid widespread anxiety. Despite the turbulence, the total market capitalization remains above $3 trillion.
Bitcoin is trading within a volatile range, consolidating above the $100,000 mark. The cryptocurrency’s recent attempt to break out met resistance, pushing it back to its initial range. Bitcoin’s role as a hedge against fiat currencies remains a key factor amid geopolitical uncertainty.
Ethereum is facing challenges, struggling to hold the $2,500 level. The 4H MA 200 is providing immediate support. Prices are consolidating in a $400 range, between $2,400 and $2,800.
Monday’s attempt to retest the high for Bitcoin was met with a sharp reversal. The cryptocurrency is hovering around its 4H 200-period moving average, currently at $104,870, as markets anticipate the upcoming FOMC meeting. Analysts expect the Federal Reserve to maintain current interest rates, a move that could impact non-interest-yielding assets like Bitcoin.
Positive ETF inflows are helping Bitcoin maintain its bid, although the inflows are not as robust as earlier in the year.
Ethereum failed to hold the $2,750 resistance zone, with anxious sentiment impacting buying flows. A break below the $2,385 to $2,425 support zone could led to a retest of early May levels near $2,000.
If buyers sustain current prices, a return to the $2,600 pivot zone and a break of the 4H 50-period moving average ($2,621) would be needed to revisit early june highs. Breaching $2,880 would signal a resumption of the bullish trend, possibly targeting $3,440.
The ETH/BTC ratio has not broken out of its consolidation range. An upward move in Ethereum prices is needed to regain late 2024 levels near 0.04. All-time highs for the spread are closer to 0.14, but even a return to 0.04 would indicate notable relative strength for ethereum and other altcoins.
Market participants will be closely watching the FOMC meeting for any signals regarding future interest rate policy. Continued ETF inflows will also play a crucial role in supporting Bitcoin’s price. For Ethereum, maintaining support above $2,500 is critical to avoid further downside risk.
