Bitcoin BTC price breaks losing streak in late Tuesday rally

Good morning. Here’s what happens:

Prices: A late surge took bitcoin back to its previous perch above $28K. Ether gathered as well.

Insight: Is crypto on the mend? What will happen on the regulatory front? CoinDesk’s annual Consensus conference features crypto industry leaders and will cover key topics over three days.

Bitcoin Rises, But Will the Rally Continue?

After five days below $28,000, bitcoin made a surprising move higher, taking much of the rest of the market with it.

The largest cryptocurrency by market cap recently traded above $28,300, up around 3.7% in the past 24 hours. The origin of the wave was difficult to determine. BTC began ticking higher less than 24 hours after embattled First Republic Bank noted that it had lost $100 billion in deposits during its first-quarter earnings presentation on Monday, rekindling concerns about the stability of the banking sector. Last month, cryptos rallied amid a rash of US regional bank implosions as investors sought refuge in assets holding their value.

“With First Republic Bank looking like it might go under, I suspect the market expects even more liquidity injections to prop up what certainly appears to be a US banking sector that is still very much in the throes of the crisis,” CEO Jake Boyle. of Caleb & Brown, a retail crypto brokerage, wrote in an email to CoinDesk. “Bitcoin, as a result, is ahead of these expectations. Cracks in the financial system are growing, albeit relatively subtle at the moment, and it’s going to be incredibly difficult for the Fed to follow its tightening regime going forward.”

Boyle added: “Bitcoin’s recent rally has more to do with liquidity injections and growing expectations that the Fed’s tightening will probably have to end fairly soon, or even more turbulence in the banking sector could occur.”

Data from research firm Coinglass also showed that around $11.3 million in BTC short positions had been liquidated since 4 p.m. Short squeezes have historically tended to accelerate price jumps.

Ether recently changed hands at about $1,870, up 1.8% from Monday, same time. Other major cryptos were mostly in the green with SOL, the native token of the Solana blockchain, and ADA, the native crypto of the Cardano smart contract platform, both recently rising more than 3%. The CoinDesk Market Index, a measure of the crypto market’s overall performance was up 2.6%.

In early trade in Asia, the Nikkei and Hang Seng indices fell slightly. US stocks closed down with the tech-heavy Nasdaq Composite down nearly 2%.

In his weekday column, CoinDesk analyst Glenn Williams highlighted that at least two technical indicators heralded a bitcoin rebound. Williams noted that BTC’s “recent decline followed an expected drop in momentum, but it also occurred in conjunction with a move toward the lower end of Bollinger Bands. Bollinger Bands plot an asset’s 20-day moving average, calculating two standard deviations above and below the average An asset price is expected to stay within two standard deviations of the average 98% of the time, so a break above or below is noteworthy.

Williams wrote that “bitcoin approaching the lower range of the Bollinger Bands raises questions about its short-term trajectory, but he added that “given recent history, technical analysts could expect BTC prices to rise, albeit methodically, back to their 20 -day average. .”

What you can expect at Consensus

Crypto is down but not out. The industry that took a beating last year is set to make its first major public showing in 2023 at Consensus, CoinDesk’s annual conference. Many of the biggest names in crypto, government, Web3 and more will be in Austin, Texas this week to discuss the current state of the industry, the devastating year it just had and what the future may hold.

On that score, things are looking up. If the first four months of the year are any indication of where the industry is headed, the rebuilding has begun.

Still, there is much more construction, policymaking, education and, yes, investment to be done. While recent markets have provided some reason for optimism, fraud and contagion have completely shattered consumer confidence in the industry. Regaining that trust will be difficult, but the opportunity lies at the feet of today’s builders, regulators and policy makers – many of whom will share their views on Consensus.

Here’s what to expect this week in Austin.

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Crypto exchange Coinbase has asked a federal court to compel the SEC to respond to a petition it filed last year asking for formal regulation within the digital asset sector. This came as House Financial Services Committee Republicans are taking another swing at stablecoin legislation with a discussion draft revealed Monday afternoon. Rep. Patrick McHenry (RN.C.) joined “First Mover” to discuss.