The rising value of crypto assets is also being aided by the current favorable macroeconomic conditions.
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Bitcoin (BTC), the world's largest crypto, went above the $17,200 barrier on January 10, as market participants continued to respond ahead of the release of US inflation data this week. In contrast, as the cryptocurrency market as a whole started to recover, the price of Ethereum (ETH) was able to surpass $1,300 this week.
In the meantime, the value of other well-known cryptocurrencies surged as well, including Dogecoin (DOGE), Ripple (XRP), and Solana (SOL). If the current trend continues, $17,050 will serve as a support level and $17,400 will operate as the next level of resistance for Bitcoin. However, the major cause of the BTC gain could be linked to lower-than-expected inflation projections, which are positive for crypto investors.
The overall cryptocurrency market is still steady, with Bitcoin and Ether showing a slight increase after yesterday's significant gain.
The rising value of crypto assets is also being aided by the current favorable macroeconomic conditions, which may be a long-term optimistic indication for the crypto market.
Federal Reserve Chair Jerome Powell Speaks
Markets will be looking for indications about monetary policy in Federal Reserve Chair Jerome Powell's speech later in the day. Powell is set to speak at a bank conference in Sweden later in the day.
Powell is expected to discuss the path of interest rates and economic growth during his speech. Markets will be on the lookout for changes in the Fed chair's combative tone, notably in light of increasing indications that US inflation is slowing.
The idea of a less aggressive Fed is expected to give the region's markets much-needed relief after a major rate hike affected them in 2022. After the crypto market was severely affected by rising interest rates in 2022, the Fed is likely to gradually boost rates in the following months, giving some relief to the market.
The United States consumer inflation data for December will be made public this week, and it is expected that this will reduce price pressures even more.
Weaker US Dollar Supports Crypto Market
Apart from that, the lower US dollar, which has been dropping as a result of speculation that the Federal Reserve may slow rate hikes, has been a major factor in supporting the Bitcoin currency.
As statistics indicated that the Federal Reserve may scale back its rate-hike program, the broad US dollar declined on the day, reaching its lowest level in seven months. Markets are losing confidence that the Fed will need to boost interest rates by over 5% to decrease inflation as a result of the Fed's aggressive rate hikes in the previous year. Investors predict a 5% rating peak by June.
In December, the US economy added jobs at a strong rate, but wage growth slowed, according to employment data released last week.
Bitcoin Price
Bitcoin is currently trading at $17,327, with a 24-hour trading volume of $18 billion. Bitcoin is experiencing a minor bearish correction after failing to break through the $17,400 resistance level.
It is now rapidly gaining support as it approaches the $17,200 target. Bitcoin's price might rise to the next resistance level of $17,400 if the $17,200 level is successfully broken.
Bitcoin created a bearish engulfing candle in the 4-hour time frame, indicating that the market may face a bearish correction before showing an additional buying trend in BTC.
The $17,000 level is likely to serve as immediate support for the bears, and a bearish breakout of this level can extend the downtrend till the following support levels of $16,800 or $16,650.
Ethereum Price
Ethereum currently trades for $1,331 with a $6.7 billion 24-hour trading volume. The ETH/USD pair is encountering heavy resistance on the 4-hour timeframe near the $1,344 level, which is extended by a double top pattern.
The price of ETH can rise to the next resistance level of $1,370 on a positive breakout of the $1,345 level. The closing of Doji and spinning top candles above the 1,315 trading level is indicative of the possibility of a significant rise.
The ETH price may find support near $1,315 on the downside, and a bearish break of that level may pave the way for additional selling to $1,275.
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