The worse the banks are doing, the better the cryptocurrency is doing. Bitcoin has risen over 7% in the past 24 hours to $26.7K, taking its gain over the past seven days to 36% and testing highs not seen since June last year. Bitcoin is now trading above its 50 and 200-week moving averages. A break of the latter in a sharp move would look like a bearish capitulation.
On the technical side, Bitcoin has quickly moved from oversold to overbought on the daily chart’s RSI. The signal for a correction would be a return of the index from above 70, which could open the way for a pullback to $25. At the same time, going against the upward trend in bitcoin is now too dangerous, as a mirror image of June’s decline is possible.
Total crypto market capitalisation rose 5% on the day to $1.14 billion, the highest since August. The driver is a reassessment of interest rate expectations by major central banks, fueling Nasdaq and gold buying alongside cryptocurrencies.
However, another trend is also worth noting. The banking problems in the US and Europe have again highlighted the vulnerability of the traditional financial sector. Once again, investors’ fears that keeping money in banks can be risky are coming to the surface.
Galaxy Digital CEO Mike Novogratz said that “the banking crisis is bringing us back to bitcoin and gold” and that now is the best time to buy BTC as a hedge against economic problems. According to Katie Wood, CEO of ARK Invest, “cryptocurrencies have suddenly become a protective asset during the banking crisis”.
According to CryptoQuant, miners took advantage of bitcoin’s March surge and started selling, which is unlikely to end in the coming days.
The FDIC has asked banks interested in acquiring Signature Bank to divert from the crypto business first. Meanwhile, the New York State Department of Financial Services (NYDFS) has previously stated that the organisation’s closure was unrelated to its interaction with the crypto sphere.
According to ByteTree Asset, bitcoin fund assets have fallen to their lowest level since October 2021 amid the collapse of several US crypto-focused banks.