How the Banking Crisis Plays a Role
Investor sentiment drastically improved on Tuesday, with many crypto assets starting to recover following the banking crisis. On-chain data indicates that the inflow to exchanges from numerous cryptocurrencies reached its highest level in six months, with the largest recorded transaction, spotted by the Whale Alert tracker, moving 11,125 BTC worth $267.95 million to Binance.
Issues at Credit Suisse, the fall of Silicon Valley Bank, and the collapse of Signature Bank have led investors to hope that the U.S. Federal Reserve may announce a smaller interest rate hike or even pause its rate increases at its upcoming meeting. Mike Novogratz, founder of Galaxy Digital, mentioned this week that Federal Reserve Chair Jerome Powell should announce monetary easing, which could shift investor sentiment in a way that benefits Bitcoin and Ethereum.
Mike Novogratz also stated that Bitcoin’s rising value was partially due to the current banking crisis, as the cryptocurrency is increasingly seen as a safe haven. Additionally, the latest Consumer Price Index (CPI) data showed that inflation in the U.S. cooled in February, further boosting expectations for a smaller rate hike.
CPI Continues to Drop
The U.S. Consumer Price Index (CPI) rose 0.4% in February compared to 0.5% in January, continuing its downward trend for the eighth consecutive month. However, despite the downward trend, the CPI remains notably high by the Federal Reserve’s standards. The federal funds rate now sits between 4.5% and 4.75% (the highest since 2007), and the main question remains: how long will the Fed maintain restrictive policy levels to fight inflation? Some analysts fear that the Fed will keep interest rates high for an extended period, potentially causing a recession that could further affect financial markets. This economic uncertainty has drawn more interest toward Bitcoin casinos, with Verde Casino being a popular option on the extensive toplist. Verde, meaning “green” in Spanish and Portuguese, could be your lucky day!
Macroeconomist and trader Henrik Zeberg stated that as long as the U.S. economy avoids a recession, Bitcoin and other cryptocurrencies will remain supported. For now, the bulls are in control of Bitcoin’s price, although the volatility in the market could again lead to panic selling if any negative news surfaces, such as a major crypto-exposed bank collapsing or a leading crypto firm going bankrupt.
Technische analyse van Bitcoin (BTC)
Bitcoin (BTC) has surged more than 25% since March 10, 2023, climbing from $19,569 to $26,533. The current price of Bitcoin stands at $24,470, still over 40% below its 2022 peak recorded in March. As shown in the chart, Bitcoin (BTC) has been in a significant downtrend since November 2021, and despite this recent jump, the overall trend remains pressured when viewed in the broader context.
Key Support & Resistance Points for Bitcoin (BTC)
In the chart from August 2022, key support and resistance levels are marked, which can assist traders in predicting potential price movements. The risk of a decline for Bitcoin (BTC) is not over yet, but if the price rises above $26,000, the next target could be near $28,000. The critical support level to watch is $22,000, and if the price falls below this level, it would signal a “SELL” position, opening the way to $20,000. If Bitcoin dips below $20,000 (a very strong support level), the next target could be around $18,000 or lower.
Factors Supporting Bitcoin (BTC) Price Growth
The volume of BTC traded in recent days has seen a notable increase. If the price breaks above the resistance at $28,000, the next price target could be around $30,000. On-chain analytics from Santiment revealed a significant surge in whale activity, reaching the highest level in four months. The “whale transaction count” indicator, which tracks Bitcoin transactions of at least $1 million in value, also rose sharply. Moreover, any positive news regarding the Fed’s monetary policy, especially if they raise interest rates less than expected, could provide an upward push for Bitcoin.
Indicators of a Potential Bitcoin (BTC) Decline
Bitcoin is currently trading above $24,000, but if the price breaks below this threshold, it may likely test the important support level at $22,000. The hoge volatiliteit van cryptocurrencies may once again cause panic selling if negative events occur, such as a bank with significant crypto exposure collapsing or a major crypto firm facing bankruptcy.
Inzichten van analisten en experts
Bitcoin (BTC) surged 35% from a low of $19,569 on March 10 to a high of $26,533 on March 14. The pressing question is whether Bitcoin has enough bullish momentum left, which depends on both technical and fundamental factors. From a technical perspective, the bulls continue to control the price action, but fundamental factors like macroeconomic developments could pull Bitcoin below $20,000 again.
Despite the collapses of Silicon Valley Bank and Signature Bank, analysts warn that the Federal Reserve may still raise interest rates by 25 bps this month, maintaining restrictive policy levels for an extended period. Matt Stucky, Senior Portfolio Manager at Northwestern Mutual Wealth Management, pointed out that this could be negative for both stock and cryptocurrency prices, with Bitcoin possibly struggling to hold above current levels in the coming weeks.
While interest rate hikes are intended to combat inflation and support the economy, some investors worry that an overly aggressive approach could lead to a severe recession. Macroeconomist Henrik Zeberg noted that as long as the U.S. economy avoids a recession, Bitcoin and other cryptocurrencies should remain supported.
Disclaimer: Cryptocurrency is highly volatile and may not be suitable for everyone. Only invest money you can afford to lose. The information provided is for educational purposes and should not be considered as investment advice.
