5 Reasons Bitcoin Is Rising Amid Bank Panic One is the key for stocks.
Bitcoin
and other cryptocurrencies marched higher again on Monday, continuing a recent rally into a new week in the face of turmoil across financial markets. There are at least five reasons why digital assets can outperform – and one is key for stocks.
The price of Bitcoin has risen 4% in the past 24 hours to over $28,200, after trading above $28,500 at points to reach the highest levels since the crypto crash accelerated last June. After stagnating and falling below $20,000 in early March, the biggest digital asset has resumed its rally to start 2023. It began in January around $16,500 with a global banking panic that sent Bitcoin into high gear.
“The recent momentum still has upside potential,” said Alex Kuptsikevich, an analyst at broker FxPro. “The $30,000 area was a significant support for a year and a half until the middle of last year, and now has a great chance to act as resistance. As we approach the $30,000 level, we should be prepared for the bulls to start taking massive profits.” »
Investors have been rocked by a global panic over banks in recent weeks, from the failure of Silicon Valley Bank on March 10 to the emergency takeover of Credit Suisse (ticker: CS ) by rival UBS ( UBS ) on Sunday. Bitcoin and digital assets have rallied despite turmoil in broader equity markets — with which crypto has been correlated for more than a year amid the pain of rising interest rates — as
Dow Jones Industrial Average
and
S&P 500
has slipped lower and lower.
Why is Bitcoin rallying?
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“The bank contagion is uniquely positive for crypto in several ways,” said Hal Press, founder of crypto hedge fund North Rock Digital.
He pointed out how the situation validates the original use of cryptos as, one, a global financial option, and, two, a protection against the deterioration of global currencies like the dollar. It also raises the prospect of a return to monetary policy that would benefit Bitcoin, and could distract regulators who have otherwise seemed intent on getting rid of digital assets. Add technical market factors into the mix and you have five reasons why Bitcoin is on the rise.
Beyond Bitcoin,
Ether
— the second-largest crypto commodity — was nearly flat at $1,775 after a buoyant weekend that saw it top $1,800 from below $1,700 on Friday. Smaller cryptos or altcoins showed similar price action, with
Cardano
1% higher though
Polygon
3% lower as the pair pared gains. Memecoins were also of their heights, with
Dogecoin
down less than 1% and
Shiba Inu
reduction 1.5%.
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Write to Jack Denton at [email protected]
