Bitcoin and Ethereum have been two of the most popular digital assets in the world, which have seen huge price jumps since their inception. As more and more people become interested in cryptocurrencies, it is important to understand what factors can take Bitcoin and Ethereum to new heights.
This article will discuss the various factors that can affect the prices of these two popular digital currencies, including fundamental and technical analysis.
In the last 24 hours, the cryptocurrency market capitalization increased by 1.45% to a staggering $1.71 trillion, while the trading volume fell by 7.81% to $79.382 billion.
DeFi’s market share of the 24-hour cryptocurrency trading volume was around 0.01% with a total volume of $9.84 billion. However, stablecoins were 99.99% at $79.82 billion, and Bitcoin had 41.65% market dominance at the time of writing, trading today at $37,527.19.
Factors that could push BTC and ETH to new heights
Next week, crypto investors will be closely watching the US Fed rate and US non-farm payrolls.
US Fed rate and FOMC
February 1 marks a busy week for central banks as the Federal Open Market Committee (FOMC), the Bank of England (BOE) and the European Central Bank (ECB) gather to announce their respective interest rate decisions.
CME’s FedWatch tool projects a high probability (98%) of a 25 basis point increase in interest rates by the Federal Open Market Committee and a target range for the federal funds rate of 4.75%.
It is difficult to decide whether central banks will raise rates sharply or less sharply. Economic performance since December has been weaker than expected, as evidenced by retail sales and manufacturing data. In addition, the components of inflation were weaker than usual.
Average hourly earnings fell significantly, while December’s Consumer Price Index (CPI) posted a negative reading for the first time since May 2020. Central bankers have been active over the past month, with most predicting a 0.25% rate hike this week and possibly another 0.25% hike in March.
Is it possible that the FOMC could indicate a 0.25% rate hike this week, but decide to pause to review cumulative hikes similar to what the Bank of Canada did?
The decision on the rate of return for cryptocurrencies will have a significant impact on the movement of their prices in the market.
US nonfarm payrolls
US nonfarm payrolls indicate the strength of the economy by tracking total nonfarm payrolls. This data is used by traders to make decisions about when to buy or sell cryptocurrencies and other digital assets. The current volatile session in the crypto market may change to a volatile market after the release of US NFP data next week.
After a downwardly-adjusted gain of 256,000 in November and beating market forecasts of 200,000, the US economy added 223,000 jobs in December 2022, the least since December 2020. In 2022, the number of full-time workers increased by 4.5 million people, or an average of 375 thousand per month, compared to 562 thousand in 2021 and 168 thousand in 2019.
The labor market is gradually returning to normal after the shock of the epidemic, and the report shows that hiring is slowing, although it is still strong.
According to Fed projections, the labor market will remain tight in 2023, but job creation will stall and the unemployment rate will rise to 4.6%.
Amid rising interest rates, weak consumer demand and a global economic downturn, many major technology corporations have already announced massive layoffs.
Bitcoin price
As of today, the current price of Bitcoin is around $23,223 . its 24-hour trading volume is about $17 billion. According to CoinMarketCap, it has a market capitalization of $447 billion and ranks #1. There are 19,275,881 BTC coins in circulation with a max supply of 21 million BTC coins.
Bitcoin’s technical outlook hasn’t changed much lately, as BTC/USD continues to trade in a tight range between $22,900 and $23,400. If the price of Bitcoin falls below $22,900, we can expect the market to take a bearish trend, potentially going down to $22,400.
If it continues to fall to $21,750, we may see an even more bearish trend.
Bitcoin’s immediate resistance level is currently set at $23,250. If it manages to overcome this mark, the cryptocurrency can reach a high of $23,900 and even $25,150.
Ethereum price
Ethereum is currently trading at $1,593 and has gained 0.50% in the last 24 hours with a total trading volume of $6.8 billion. It is ranked #2 on CoinMarketCap with a real market capitalization of $195 billion.
For four hours, ETH/USD traded sharply, holding just below $1,600. A close of the candles below this level has a good chance of increasing the pressure on Ethereum. Additionally, Ethereum has formed a symmetrical triangle, indicating indecision among investors.
On the downside, support is present at $1,560 and a break below this level could take ETH to $1,500. Conversely, a bullish breakout above the $1,625 level could send ETH towards the $1,680 mark.
