Bitcoin took a surprising ride uphill after persisting for five days below $28,000 and taking almost the entire market with it.
Bitcoin, being the largest cryptocurrency by market capitalization, was recently trading above $28,300, which is up about 3.7% over the past 24 hours. However, the origins of the uphill were difficult to determine.
Also, BTC began ticking upward in less than 24 hours after mobilising First Republic Bank noted that it had lost $100 billion in deposits during its first quarter earnings presentation held on Monday, reviving concerns about the financial sector’s stability.
Moreover, in the previous month, cryptocurrency increased amid a rash of U.S. regional banking breakdowns as investors looked for refuge in assets that held their value.
Jake Boyle, Director of Caleb & Brown, a retail crypto brokerage, wrote in an email to CoinDesk that “With First Republic Bank looking like it could go under, I suspect the market is anticipating yet more liquidity injections to prop up what certainly seems to be an American banking sector that is still very much in the throes of crisis.”
“Bitcoin, as a result, is front-running these expectations. Cracks in the financial system are growing, even if relatively subtly at the moment, and it’s going to be incredibly difficult for the [Federal Reserve] to adhere to its tightening regime going forward,” he added.
He also said that Bitcoin’s rally of late has more to do with liquidity injections and increasing expectations that the Fed’s strengthening might probably have to end soon moderately. Simultaneously, even greater turmoil in the banking sector could emerge.
According to Coinglass data, around $11.3 million in BTC short positions have been closed down since 4 p.m. ET. Whereas, short compressions have typically accelerated price values.
On the other hand, along with Bitcoin, Ether (ETH) has been changing hands at about $1,870, which is up 1.8% from Monday at the same time. Beside these two cryptocurrencies, other major cryptos were also climbing up, with SOL, the native token of the Solana blockchain, and ADA, the native crypto of the Cardano smart contracts network, which rose more than 3% concurrently.
As a measure of the crypto market’s overall performance, the CoinDesk Market index was up 2.6%.
Later, in early Asia trading, the Nikkei and Hang Seng indexes were down slightly. Due to this, U.S. stocks on the tech-heavy Nasdaq Composite closed down nearly 2%.
In his weekday column, Glenn Williams, an analyst at CoinDesk, highlighted that at least two technical indicators were anticipating a bitcoin recoil.
Williams noted that BTC’s “recent decline accompanied an expected drop in momentum, but it also occurred in conjunction with a move towards the lower end of the Bollinger Band. Bollinger Bands plot an asset’s 20-day moving average and calculate two standard deviations above and below the average.”
“An asset’s price is expected to stay within two standard deviations of the average 98% of the time, so a breach above or below is noteworthy,” he added.
“Bitcoin approaching the lower range of its Bollinger Bands raises questions about its near-term path, but he added that given recent history, technical analysts could expect BTC prices to advance, albeit methodically, back to their 20-day average,” Williams wrote in an email.
- Published By Team Genuine Reporter