Bitcoin and Ethereum extend gains on hopes of less hawkish Fed

Bitcoin and Ethereum Price Forecast:

Bitcoin and Ethereum shake off Fed fears and extend gains

Bitcoin prices rose on Monday after the SVB collapse sparked fear throughout the banking system. As US regulators rushed to ease fears on Sunday evening, the infusion of additional liquidity and the safeguarding of client deposits sent the cryptocurrency higher.

Related article: US dollar grips as SVB Fallout brings US CPI in sight ahead of Fed

Although the sudden shutdown of Signature and New York Bank posed an additional threat to digital assets, assurances from the US Treasury Department, the Fed and the Federal Deposit Insurance Corporation (FDIC) helped boost demand for risky assets.

In addition, the recent event has reduced expectations for another aggressive interest rate hike at the upcoming FOMC. Because both Bitcoin and Ethereum are sensitive to rising interest rates, a shift in the narrative pushed the two-year yield to a six-month low, weighing on dollar strength.

The image is taken from Nick Cawley’s article: Gold price – XAU/USD Eyes Support as CPI Approaches and US Bond Yields Return

US 2-YEAR RETURN

Bitcoin price analysis

With BTC/USD progressing towards the next zone of psychological resistance at $25k, ETH/USD reached $1700 which remains major resistance for the impending move. Following the formation of a hammer candle on the daily chart, the aggressive move higher has seen Bitcoin rise over 20% since Friday’s close.

As the current daily high remains around the $24,917 handle, a potential ascending three method formation (a five candlestick pattern) on the weekly chart suggests that bullish continuation may be possible if prices can clear $25,000.

Bitcoin (BTC/USD) Daily Chart

Chart prepared by Tammy DaCosta using TradingView

Bitcoin key levels

Ethereum Price Analysis

With Ethereum trailing its major counterpart higher, a bullish engulfing pattern formed on the daily chart, indicating a change in direction after last week’s decline. As bullish momentum increased, prices rose above the 50-day MA (moving average), fueling further gains.

But with the CCI (commodity channel index) for both Bitcoin and Ethereum now lingering in overbought territory, buyers will need to hold above $1,700 in hopes of retesting the February high.

Daily chart for Ethereum (ETH/USD).

Chart prepared by Tammy DaCosta using TradingView

Key levels for Ethereum

— Posted by Tammy Da Costa, Analyst for DailyFX.com

Contact and follow Tammy on Twitter: @Tams707