Bitcoin price on its best winning streak since last bull market. What will be next.
Bitcoin
and other cryptocurrencies were higher on Wednesday, matching their biggest gains from a Tuesday week but still in the midst of the best winning streak for digital assets since the last bull market.
The price of Bitcoin has risen 2% in the past 24 hours to $24,800. The biggest digital asset has retreated from a peak of $26,500 in recent trading – the highest level since the crypto crash accelerated last June – but on Tuesday it still hit its best four -day stretch since February 2021, according to Dow Jones Market Data. Tearing higher from under $20,000 as recently as last weekend, a return to the $25,000 zone should reassure traders that Bitcoin is looking bullish again. But there is a need to consolidate gains.
“The price seems to be developing a bearish pattern, indicating that a top may be in the works for now,” said Naeem Aslam, chief investment officer at Zaye Capital Markets. “Bulls, on the other hand, should rejoice as the price has broken above the $25,000 level, which was a key resistance zone, and a breach of this level has opened the way for the price to retest its next resistance zone at $30,000. .”
Bitcoin has revealed how closely related crypto sentiment is to the macro picture, and has surged in recent days in the face of what can be interpreted as severe headwinds for digital asset markets.
The two leading US crypto banks, Silvergate Capital and Signature Bank, have both collapsed in the past week, boding badly for both token liquidity and sentiment for digital assets among regulators. Although the bank failures may lead to negative effects on the market function, prices have continued to rise.
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Ironically, federal regulators shutting down Signature Bank as well as Silicon Valley Bank — marking the biggest bank failure since the 2008-09 financial crisis — lit the spark for the latest crypto price rally. The pressure on banks has been an unintended consequence of the Federal Reserve’s dramatic rate hikes over the past year – a campaign to tame decades of high inflation with aggressive monetary policy.
Higher prices also dampen demand for risk-sensitive assets, such as stocks and especially crypto. The bank collapses, in addition to encouraging inflation data on Tuesday, have pushed traders to change expectations for the Fed’s next move on interest rates, which will come after the meeting on 21-22. March in its policy-setting committee. Bitcoin’s jump higher was really a more extreme expression of the sentiment that was similarly driving
Dow Jones Industrial Average
and
S&P 500
higher.
“We’ve seen Bitcoin perform as the leading risk-on asset over the past two years,” said James Lavish, managing partner of the Bitcoin Opportunity Fund. “Investors believe that the Fed has taken a 50 basis point hike off the table for next week, and at worst it will be a 25 basis point hike, and maybe no more hikes at all. Bitcoin … was able to capitalize on this the sentiment and move to risk before all other assets.”
Beyond Bitcoin,
Ether
— the second-largest crypto — advanced 2% to $1,700. Smaller cryptos or altcoins were also in the green, too
Cardano
up 1% and
Polygon
jumped 6%. Memecoins were also to be won, too
Dogecoin
climbing 5% and
Shiba Inu
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3% higher.
Write to Jack Denton at [email protected]
