As Bitcoin has reached its highest level in nine months, with many wondering just how high the cryptocurrency can go. With a market cap of over $1 trillion and an increase in demand as investors seek a safe haven amid economic uncertainty, the price of bitcoin has skyrocketed in recent months.
This has led many to wonder whether the cryptocurrency is in the midst of a sustained bull run or whether it is due for a correction.
US banking crisis: impact on financial markets and cryptocurrency prices
Last week, the sudden collapse of three banks namely Silvergate, Silicon Valley Bank (SVB) and Signature Bank exposed the fragility of the traditional banking sector. Analysts have identified adverse market conditions and inadequate risk management as major contributors to the downfall of SVB and Silvergate.
The collapse of SVB had far-reaching effects on the global banking industry. Credit Suisse, the second largest Swiss banking institution, was also affected, facing a severe crisis that required a $54 billion rescue package from the Swiss Central Bank.
With the banking crisis unfolding, investors are turning to cryptocurrencies as a reliable alternative. BTC/USD continues to rise in value as fears of a possible global financial crisis continue to grow.
The relationship between the Federal Reserve and BTC
Overnight balance sheet data from the Federal Reserve showed that nearly $300 billion was injected into the economy to stave off the financial crisis, marking a new trend.
The action effectively reversed months of liquidity withdrawals under the Federal Reserve’s quantitative tightening (QT) policy, and experts are anticipating the re-introduction of quantitative easing (QE).
The recent reversal of the Federal Reserve’s quantitative tightening policy, which was in effect through 2021, has enthused BTC/USD bulls, who are now looking to push the price higher.
Additionally, growing concerns about a global banking collapse have made the Fed less likely to implement an interest rate hike of 50 basis points. Instead, Reuters predicts that the Federal Open Market Committee (FOMC) could raise the federal funds rate by only 25 basis points at its upcoming 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 decline.
Currently, the dollar index is at 103.86 and it could continue to decline, which could be beneficial for BTC/USD as a fall in the US dollar could lead to an increase in the value of bitcoin.
Binance CEO: BTC resistant to inflationary pressure
On March 18, Binance CEO Changpeng Zhao took to Twitter to praise a fundamental feature of bitcoin technology. He emphasized the cryptocurrency’s ability to resist inflationary pressures, a quality that traditional fiat currencies lack.
In his tweet, Zhao explained that unlike fiat currencies, bitcoin cannot be printed out of thin air by anyone, and mining is a key function in its creation.
Zhao’s comments came in response to reports that the US government issued a $300 billion rescue package “out of thin air” following the collapse of three major banks in the country.
According to data from market monitoring website Coinmarketcap, BTC/USD has crossed $27,500 in the past 24 hours. This price level is one of the highest for BTC/USD in the last nine months.
bitcoin price
On March 18, bitcoin started trading at $27,350. Within the last 24 hours, its value has increased by 2.75%, and it is currently trading at $27,416. BTC/USD experienced significant volatility, reaching a high of $27,605 and a low of $27,053.
Furthermore, bitcoin has gained more than 35% in value over the past week, with concerns about recent bank failures and potential interest rate hikes playing a significant role in driving its value.
Bitcoin price saw a sharp decline after a brief consolidation period around $26,500. This triggered a short term downside bias as there was a decline below the $25,000 and $25,500 support levels.
As of Saturday, the BTC/USD pair is trading with a strong bullish bias, but it is facing immediate resistance near the $27,750 level. A bullish breakout above this level could propel bitcoin price towards the $30,750 milestone.
However, if the $27,750 level proves to be a resistance, there could be a selloff, with a potential drop in the price to $25,200 or $23,020.
Top 15 Cryptocurrencies to Watch in 2023
Industry Talk has put together a curated list of the top 15 cryptocurrencies to watch in 2023, including insights from experts at Cryptonews. Whether you are a seasoned crypto investor or new to the market, this list provides valuable insight on promising altcoins that could make a significant impact on the industry.
Stay updated with new ICO projects and altcoins by checking back regularly.
Disclaimer: The Industry Talks section features insights by crypto industry players and is not part of the editorial content of 0x0news.com.
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