Amid the ongoing SVB saga and the fears engulfing the traditional US financial system, Bitcoin is advancing for a fourth consecutive day, surging past its 50-day simple moving average (SMA) to come within touching distance of the psychologically-important $25k line.
Bitcoin’s rebound from sub-$20k domain is all the more remarkable, considering that the recent US banks that have recently collapsed included two crypto friendly entities, namely Silvergate Capital and Signature Bank:
Crypto is once again attempting to stake its claim as a purported “safe haven” (or at least as a notable alternative to fiat currency), amid the turmoil in the traditional banking sector.
As global financial stocks lost US$465 billion in market cap so far this week, Bitcoin has seized the opportunity to soar by 22% since Friday.
To be certain, this does not mean that cryptos woes are over.
From the shuttering of crypto-friendly banks to a still-tightening noose by regulators following the FTX fallout, the sector it not yet out of the woods.
Crypto assets are still susceptible to intense selloffs as evidenced over the weekend when USD Coin (USDC) - the second largest stablecoin, lost its 1-for-1 peg with the US Dollar. The steep drop occurred after the stablecoin’s issuer, Circle Internet Financial Ltd, revealed it held US$3.3 billion (or 8%) of its reserves that back up USDC at the ill-fated SVB.
Though to be clear, USDC has since recovered and regained that 1-for-1 peg.
Still, the crypto world could’ve done without a reminder of last year’s infamous implosion of the TerraUSD stablecoin.
And many traders weren’t ready to stick around to find out for certain, withdrawing over US$1.7 billion of USD Coin yesterday (Monday, March 13th).
From a price perspective …
Bitcoin is about to come face-to-face with a familiar foe: the US$25,000 resistance line that had thwarted Bitcoin bulls since August 2022.
A significant breach of that psychologically-important mark might spur further gains, perhaps from more proponents of crypto who’re seeking shelter from the SVB storm.
However, from a fundamental perspective …
Markets are still keeping a wary eye of the incoming US February inflation data due later today.
A higher-than-expected CPI print, above the forecasted 6% figure, that revives market bets that the Fed will continue persisting with its aggressive rate hikes, could prompt Bitcoin to unwind some of its recent gains.
In such a scenario, support may arrive around the $24k region which marked recent year-to-date cycle highs, with stronger support potentially arriving around the $23k mark where also lies Bitcoin’s 50-day simple moving average (SMA).
Still, it appears likelier that markets will continue being gripped by contagion fears surrounding the SVB saga for a while more, at least until the lead up to the March 21-22 Fed policy meeting.
And if such fears continue permeating through global financial markets in the interim, that may well keep Bitcoin prices supported, given crypto’s touted stature as an alternative to fiat currency.
The world’s largest digital coin is holding up relatively well, despite the latest salvos against the crypto world.
28 March 12:10
The world’s largest crypto by market cap is taking a healthy pause after briefly breaching the $28,000 mark, though still holding around its highest levels since June 2022. Bitcoin’s year-to-date gains soared by as much as 72% before paring such advances to 67% at the time of writing.
21 March 10:55
At the time of writing, the value of the world’s largest crypto has fallen by about 2.9% so far this month. Bitcoin is now limping along, barely keeping its head above the psychologically-important $22,000 mark for the time being.
7 March 09:54
Bitcoin is set to wrap up February 2023 with gains of less than 2% (barring a surge later on this final day of the month), and is on course for posting back-to-back monthly gains for the first time since February-March 2022.
28 February 11:44
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