Crypto momentum returns as Bitcoin price climbs back above $28K

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(Kitco News) – The cryptocurrency market resumed its upward trend on Thursday as investors finally got the memo sent yesterday by Federal Reserve Chairman Jerome Powell that the Fed’s interest rate hike campaign may soon be coming to an end due to ongoing concerns about the stability of the US Federal Reserve. global banking system.

And it wasn’t just crypto traders who saw this as an opportunity to enter the markets, as US stocks trended higher in early trade, saw a dip in the red near midday, but managed to end the trading session higher. At the closing bell, the S&P, Dow and Nasdaq were up 0.44%, 0.42% and 1.01% respectively.

Data from TradingView shows that after reversing course from a dip below $27,000 on Wednesday, Bitcoin (BTC) climbed higher throughout the trading day to reach an intraday high of $29,000 before retreating to support at $28,300, which has been a consistent level of support for the last week.

BTC/USD 4-hour chart. Source: TradingView

Despite yesterday’s drop, “April Bitcoin futures prices were trading higher in early US trading Thursday,” according to Kitco senior technical analyst Jim Wyckoff, who noted there was “not much new” since prices hit a contract high on Monday.

“Bulls continue to have the solid near-term technical advantage amid a new price uptrend in place on the daily bar chart,” Wyckoff said, adding, “More upside is likely in the near term.”

The Resurgence of Bitcoin’s Safe Haven Status

Further insight into the resilience of the crypto market was provided by BTCM Chief Economist Youwei Yang, who highlighted yesterday’s decision by Fed Chair Powell and European Central Bank President Christine Lagarde to stick with the plan for interest rate hikes “despite market uncertainty and particularly turmoil in the banking sector.”

“The narrative of Bitcoin as the safe haven resurfaced as traditional finance (TradFi) faces instability in the high interest rate environment,” Youwei said. “The battle of wits between Crypto and TradFi again highlights the benefits of self-managed money (wallets and DeFi) rather than having someone (banks or fund managers), especially for high-net-worth individuals.”

Youwei highlighted recent statistics showing large amounts of money flowing into the crypto ecosystem – and Bitcoin in particular – from banks in the US and Europe, but suggested that the increase in regulatory scrutiny from regulators in those regions has dampened some of the momentum. “But still, the mindset is changing gradually and solidly, which is probably what drew the attention of regulators, not random timing, FTX crash is probably only part of the reason,” he wrote.

“Therefore, with the narrative and money flow, Bitcoin has skyrocketed recently, surpassing $28K and just inches away from $29K earlier today, almost doubling from the FTX crash low of $15.8K,” Youwei noted. “This level can be sustained in the short term, but what just happened with the SEC filing a lawsuit against Justin Sun (TRX founder) could lead to some selling pressure if the effect spreads.”

With the threat of further global liquidity problems and possible enforcement actions from regulators, Youwei suggested there could still be one or two more notable downsides in the crypto market this year before things pick up for a bull market in 2024 and 2025.

“That could mean $50-70,000 Bitcoin as a base, and >$100,000 if optimistic,” he said. “Someone calling for $1 million Bitcoin, while I’d be more than happy to see that, I don’t think it’s realistic given the restriction of money supply to the sector, such as closing Signature Bank and restricting other crypto-friendly banks.”

Altcoins are regrouping and climbing higher

It was a generally positive day for the altcoin market as token prices began to recover from yesterday’s drop while many crypto users celebrated their latest crypto stimulus check by layer-two protocol Arbitrum, which launched its ARB token in true crypto fashion – with a airdrop to its early adopters.

Daily performance in the cryptocurrency market. Source: Coin360

Space ID (ID) was the biggest gainer of the day, climbing 25.51% to trade at $0.5025, followed by a 16.43% gain for Celer Network (CELR) and a 15.4% gain for Mask Network (MASK).

The total cryptocurrency market cap is now $1.18 trillion, and Bitcoin’s dominance rate is 46%.