A bullish break in Crypto
Market image
Bitcoin is swimming in the woes of the US banking industry, gaining 9% in the past 24 hours and over 25% from Friday’s lows. Remember that bitcoin was created in 2008 to respond to distrust of the global financial system. This feature of bitcoin as capital preservation was revoked over the weekend and resolved on Monday.
BTCUSD bounced back strongly above its 50-day moving average, indicating that long- and medium-term sentiment remains bullish.
At the same time, the short-term mood is more wait-and-see. Since last night, bitcoin has bounced around the 24.5 level. About a month ago, selling pressure prevented the price from going up. The last stop is an attempt to catch your breath before a new wave.
On the weekly time frame, bitcoin has passed the 50-week mark and is testing the 200-week mark. After the withdrawal in the last three weeks, the chances of an outbreak have increased significantly.
Basically, cryptocurrencies are being helped by a change in monetary policy expectations. In less than a week, markets have gone full circle on expectations, from a 25-point hike to a 50-point hike and back. In addition, expectations for further gains later this year fell on Monday and Friday, which is positive for cryptocurrencies, the Nasdaq index and gold.
Another recalculation resulted in a 1.16% increase in bitcoin mining difficulty. The index reached an all-time high of 43.55T.
News background
According to CoinShares, investments in crypto funds fell by a record $255 million last week, the fifth consecutive week of outflows. Bitcoin fell by $244 million and Ethereum by $11 million.
According to Santiment, cryptocurrency “whales” and “sharks” have started to gather extremely quickly. Major BTC holders added $821 million to their accounts in just one week.
Another bank is closed in the US. The Fed shut down Signature Bank, one of the largest lenders in the cryptocurrency industry. The regulator stressed that all of Signature’s deposits would be returned to its owners and the Silicon Valley bank’s customers. Against this backdrop, the USDC and DAI stablecoin rates have almost returned to $1.
Changpeng Zhao, CEO of the Binance exchange, said banks had become a risk to stablecoins backed by fiat currencies. And fiat currencies themselves, he said, could pose a risk to cryptocurrencies, stablecoins and financial stability in general.
This article was written by FxPro’s Senior Market Analyst Alex Kuptsikevich.
