As Bitcoin hits its highest level in nine months, many are wondering how far the cryptocurrency can go. With a market capitalization of over $1 trillion and a surge in demand as investors seek a safe haven amid economic uncertainty, the price of Bitcoin has skyrocketed in recent months.
This has left many wondering if the cryptocurrency is in the midst of a sustained bull run or if it needs to undergo a correction.
US banking crisis: impact on the financial market and cryptocurrency prices
Last week, the sharp fall of three banks, namely Silvergate, Silicon Valley Bank (SVB) and Signature Bank, highlighted the fragility of the conventional banking sector. Analysts have identified unfavorable market conditions and inadequate risk management as major contributors to the collapse of SVB and Silvergate.
The fall of SVB had profound implications for the global banking industry. Credit Suisse, Switzerland’s second-largest banking institution, was also hit, facing a severe crisis that required a $54 billion bailout from the Swiss Central Bank.
With the banking crisis unfolding, investors are turning to cryptocurrency as a reliable alternative. As fears of a possible global financial crisis escalate, the value of BTC/USD has continued to rise.
The link between the Federal Reserve and BTC
Data from the Federal Reserve’s overnight balance sheet revealed that about $300 billion had been injected into the economy to deal with the financial crisis, triggering a new upward trend.
This action effectively reversed months of liquidity withdrawal under the Federal Reserve’s quantitative tightening (QT) policy, and experts anticipate the reintroduction of quantitative easing (QE).
The recent reversal of the Federal Reserve’s quantitative tightening policy, which had been in effect since 2021, has supported BTC/USD bulls, who are now looking to push prices higher.
Additionally, growing concerns about a global banking meltdown have reduced the likelihood that the Fed will implement a 50 basis point interest rate hike. Instead, Reuters predicts that the Federal Open Market Committee (FOMC) may only raise the federal funds rate by 25 basis points at its next meeting on March 22.
Inflation and Federal Reserve rate hikes can have a significant impact on the value of Bitcoin. When the Fed’s interest rate decision becomes uncertain, the dollar index tends to fall.
Currently, the Dollar Index is at 103.86 and may continue to decline, which may be beneficial for BTC/USD, as a decline in the US Dollar may lead to an increase in the value of Bitcoin.
Binance CEO: BTC Resisting Inflationary Pressures
On March 18, Binance CEO Changpeng Zhao took to Twitter to praise a fundamental feature of Bitcoin technology. He pointed to the ability of cryptocurrency to withstand inflationary pressures, a quality that traditional fiat currencies lack.
In his tweet, Zhao pointed out that unlike fiat currencies, Bitcoin cannot be printed from scratch by anyone, and mining is a key function in its creation.
Zhao’s comments came in response to reports that the US government had issued a $300 billion bailout “from scratch” following the collapse of three major banks in the country.
Over the past 24 hours, BTC/USD has surged above $27,500, according to data from market monitoring website CoinMarketCap. This price level is one of the highest BTC/USD has reached in the past nine months.
bitcoin price
On March 18, Bitcoin started trading at $27,350. In the past 24 hours, its value has increased by 2.75% and it is currently trading at $27,416. BTC/USD has seen fluctuations, reaching its highest value at $27,605 and the lowest at $27,053.
Additionally, Bitcoin’s value has jumped more than 35% in the past week, with recent news of bank failures and concerns about possible interest rate hikes playing a big role in boosting its value. value.
Bitcoin price saw a sharp decline after a brief period of consolidation at around $26,500. This led to a short-term negative trend as it broke below the $25,000 and $25,500 support levels.
Since Saturday, the BTC/USD pair has been trading with a strong bullish bias, but it faces immediate resistance near the $27,750 level. A bullish break above this level could propel Bitcoin price towards the $30,750 cap.
However, if the $27,750 level proves to be a point of resistance, a sell-off may occur, potentially driving the price down to $25,200 or even $23,020.
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Top 15 cryptocurrencies to watch in 2023
Industry Talk has compiled a curated list of the top 15 cryptocurrencies to watch in 2023, with insights from experts at Cryptonews. Whether you are an experienced crypto investor or new to the market, this list provides valuable information on promising altcoins that could have a significant impact on the industry.
Stay up to date with new ICO projects and altcoins by checking back regularly.
Disclaimer: The Industry Talk section features information from crypto industry players and is not part of the editorial content of Cryptonews.com.
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