US regional bank failures trigger Bitcoin rally, $30,000 in sight
BANKER FAIL Headline in a newspaper. The newspaper is on a desktop.
Bitcoin (BTC) is on the verge of reaching the $30,000 milestone, but regional banks in the United States are facing significant anxiety and fear. Investors are worried about the potential for contagion after the recent struggles of PacWest, a California-based lender.
The bank’s shares have fallen by as much as 60% overnight, prompting it to reassure investors and confirm it is in talks with potential partners and investors about a deal, as reported by The Telegraph.
Despite insisting they have not experienced any unusual deposit flows, regional bank shares are down more than 5% today, with none of the 349 banks in the sector seeing gains.
Regional banks take a hit, 130 stocks down more than 5%
The fear surrounding regional banks is undoubtedly fueled by the recent failure and sale of First Republic Bank to JPMorgan Chase. This high-profile event has highlighted the potential risks and challenges facing smaller banks, particularly in the current economic climate.
Despite the broader concerns in the financial sector, Bitcoin has climbed above the $29,000 level, up 1.7% in the past 24 hours, potentially fueled by the ongoing concerns surrounding the US banks.
This suggests that there may be some investors who are turning to alternative assets as a potential hedge against risk and uncertainty in traditional financial markets, which have shown no signs of easing in the near term.
Furthermore, according to CryptoCon, a Bitcoin market analyst, the exact BTC bull market is here. This is based on the midline transition of the 3 Week Keltner Channels, a technical indicator that measures volatility and trend in Bitcoin. When BTC crosses the midline, currently priced at $26,500, it is a strong signal that a bull market has begun.
In addition, CryptoCon notes that Bitcoin has historically not returned below the midline after crossing, supporting the argument that a bull market is underway. According to the analyst, this has been true, as the crossover has consistently led to months of bull market activity.
Bitcoin on the rise as US bank failures mount
Daan Crypto Trades, a cryptocurrency market analyst, has analyzed Bitcoin’s dominance and potential impact in the broader cryptocurrency market. According to the analyst, Bitcoin Dominance, which measures the percentage of the total cryptocurrency market cap accounted for by Bitcoin, is currently trading in the 48-49% range.
Daan suggests that if Bitcoin can push through this range and make new local highs, it could move towards 52% or higher. This is likely to continue the ongoing trend of Bitcoin dominance, which has increased in recent months.
However, the analyst notes that if Bitcoin remains range-bound between $27-30K, it could lead to a recovery in the ALT/BTC pairs, as Bitcoin dominance falls. This suggests that altcoins, or alternative cryptocurrencies to Bitcoin, could outperform Bitcoin in the short term.
At the time of writing, the top cryptocurrency in the market is trading at $29,000. In the last 24 hours, there has been a total liquidation of $100 million in short positions. The question is whether Bitcoin will continue its uptrend or experience a healthy pullback to replenish liquidity below its crucial resistance levels.
Featured image from iStock, chart from TradingView.com
