Bitcoin’s relentless rally ever since Silicon Valley Bank’s collapse caused a mini-meltdown earlier this month is showing signs of slowing, but not before the benchmark cryptocurrency has made significant gains in the process.
Since that fateful day on March 10, when SVB was unable to sustain itself in the midst of a bruising run, BTC/USDT has rallied over 40%, hitting a high of $28,470 on Monday, March 20.
Since then, the pair has cooled, posting small losses on Monday and then adding around 1.4% on Tuesday, while staying largely flat at $28,125 this morning.
Bitcoin (BTC) has been on a rollercoaster ride since the FTX collapse last November – Source: currency.com
Open interest in bitcoin futures remains at a nine-month high, indicating continued volatility among traders.
The question for the market is: Can bitcoin stabilize at this price point?
Much of the coin’s recent strength was due to its perceived safe-haven status when the traditional markets were reeling, so it stands to reason that when things calm down, so will the price of bitcoin.
If investors decide to take profits a lotcould we see some price deflation.
There is also the specter of ongoing rate hikes, less likely now than they were just two weeks ago, but significantly higher than expected inflation data from the UK this morning proves that the problem persists, and thus rate hikes.
Risk-on assets tend to take a backseat whenever central bank hawks take the wheel, and with US and UK interest rate decisions due in the next 24 hours, that’s a headwind that can’t be ignored.
That said, Grayscale’s Matt Maximo and Michael Zhao suggested that “bitcoin could emerge as a strong performer regardless of the outcome,” as safe haven money allocations will remain buoyant for some time to come.
Currently, Binance’s order book is showing strong support at the 28k mark, which could act as a buffer for losses below this point, while selling pressure is most evident at US$28,400.
Ethereum’s (ETH) price action has been more muted than bitcoin’s, although the second largest cryptocurrency by market capitalization has still benefited from the recent turmoil.
ETH/USDT has rallied 30% since March 10, hitting a high of $1,840 on Sunday, March 19. The pair has been quite volatile since, with bulls and bears treading between the 17k and US$1850 price range.
At the time of writing, ETH/USDT was changing hands at USD 1,790, after falling 0.6% in early trade. ETH bears have set up a significant selling wall at USD 1807.
Binance order book shows bearish resistance at USD 1,807 – Source: binance.com
Ripple waves forward
Ripple Labs’ XRP token steamed ahead in the past 24 hours, gaining around 20% to bring the payment token to a four-month high of 0.457 cents.
As has been the case with previous rallies, it correlates with renewed optimism that Ripple Labs is set to trump the US Securities and Exchange Commission (SEC) in the long-running SEC vs. Ripple Labs lawsuit launched way back in December 2020.
The regulator claims that XRP is an unregistered security, and thus Ripple Labs illegally raised $1.3 billion from the initial coin offering.
A favorable pending result for Ripple Labs is clearly being priced into the market.
The rest of the top-20 altcoin set has remained relatively muted, with Polkadot (DOT), Shiba Inu (SHIB), Tron (TRX) and Litecoin (LTC) moving to week-over-week losses in the low single digits.
Global cryptocurrency market capitalization rose 2.8% to $1.18 billion overnight, while total value in decentralized finance (DeFi) rose 1.3% to $48.8 billion.
