The worse the banks do, the better the cryptocurrency does. Bitcoin has risen over 7% in the past 24 hours to $26.7K, taking its gain over the past seven days to 36% and testing highs not seen since June of last year. Bitcoin is now trading above its 50 and 200 weekly moving averages. A break of the latter in a sharp move would look like a bearish capitulation.
On the technical side, Bitcoin quickly moved from oversold to overbought on the daily chart’s RSI. The signal for a correction would be a return of the index above 70, which could open the way for a retreat to $ 25. At the same time, going against the upward trend in bitcoin is now too dangerous, because a mirror image of the June decline is possible.
The total crypto market capitalization rose 5% on the day to $1.14 billion, the highest since August. The driver is a reassessment of interest rate expectations by major central banks, fueling Nasdaq and gold buying along with cryptocurrencies.
However, another trend is also noteworthy.
The banking problems in the United States and Europe have once again emphasized the vulnerability of the traditional financial sector. Once again, investors’ fears that keeping money in banks can be risky are coming to the surface.
Galaxy Digital CEO Mike Novogratz said that “the banking crisis brings us back to bitcoin and gold” and that now is the best time to buy BTC as a hedge against economic problems. According to Katie Wood, CEO of ARK Invest, “cryptocurrencies suddenly became a hedge asset during the banking crisis”.
According to CryptoQuant, miners took advantage of bitcoin’s March surge and began selling, which is unlikely to end in the coming days.
The FDIC has asked banks interested in acquiring Signature Bank to first steer clear of the crypto business. Meanwhile, the New York State Department of Financial Services (NYDFS) previously stated that the closure of the organization is not related to its interaction with the crypto sphere.
According to ByteTree Asset, bitcoin fund assets fell to their lowest level since October 2021 amid the collapse of several US crypto-focused banks.
This article was written by FxProAlex Kuptsikevich’s Senior Market Analyst.