As Bitcoin continues to reach its peak in nine months, many are wondering just how far the cryptocurrency could go. With its $1 trillion market cap and heightened demand as investors search for safety amidst financial uncertainty, the price of Bitcoin has been on the rise.
This has prompted speculation as to whether this is the start of a long-term bull market or if a correction is due soon.
US Banking Crisis: Impact on Financial Market and Cryptocurrency Prices
Just last week, the sudden collapse of three banks – Silvergate, Silicon Valley Bank (SVB) and Signature Bank – highlighted the fragility of the traditional banking sector. Analysts believe that SVB’s decline was largely due to unfavorable market conditions and inadequate risk management by Silvergate.
The SVB’s fall had far-reaching implications for the global banking system, with Credit Suisse requiring a $54 billion rescue package from the Swiss Central Bank to keep the second-largest Swiss banking institution afloat.
Amidst the ongoing banking crisis, cryptocurrency is increasingly being seen as a reliable option. As fears of a global financial meltdown continue to mount, the BTC/USD pair is also steadily rising.
The Connection Between The Federal Reserve and BTC
Data from the Federal Reserve’s overnight balance sheets disclosed that the economy had been given about $300 billion to tackle the financial crisis, resulting in an upward trend.
This action reversed months of liquidity withdrawals in accordance with the Federal Reserve’s quantitative tightening (QT) strategy, which has been in place since 2021. Experts anticipate that the Federal Open Market Committee (FOMC) will only raise the Federal Funds Rate by 25 basis points at its upcoming meeting on March 22.
The BTC/USD bulls are attempting to increase the value of Bitcoin by applying a quantitative easing (QE) policy, as concerns about a worldwide economic collapse have lowered the probability of this occurring. When the uncertainty surrounding interest rates is high, the dollar index tends to go down.
At present, the dollar index is at 103.86, and it could continue to drop, which could be advantageous for BTC/USD as a decreasing US dollar can increase the price of Bitcoin.
Binance CEO: BTC Resistant To Inflationary Pressures
On March 18, Binance CEO Changpeng Zhao took to Twitter to praise a key feature of Bitcoin technology, noting that cryptocurrency is insulated from inflationary pressures, which is not a characteristic of traditional fiat currencies.
In his tweet, Zhao pointed out that, unlike fiat currencies, it is possible to generate your own currency via Bitcoin mining.
Zhao’s remarks were made in response to reports that the US government had issued a $300 billion rescue package “out of thin air” in the wake of the failure of three banks, plunging the nation into a state of emergency.
Coin market monitoring data reveal that BTC/USD has gone beyond $27,500 in the last 24 hours. This cost level is among the highest BTC/USD has hit in the past nine months.
Bitcoin Price
On March 18, Bitcoin began trading at $27,350. Over the last 24 hours, there has been a 2.75% rise in its value and it is currently trading around $27,416. BTC/USD has experienced highs and lows, reaching its highest point at $27.605 and its lowest at $27.053.
The value of Bitcoin has also increased by 35% in the last week, with recent news of bankruptcies and worries about potential interest rate increases playing a major part in pushing up its price.
After a brief period of consolidation near $26,500, prices saw a sharp decrease, leading to a short-term bearish trend that dipped below the $25,000 and $25,500 support levels.
On Saturday
