Bitcoin Continues its Bullish Run, Rises to $32,000 as it Outperform Altcoins
Following nine weeks of losses, Bitcoin (BTC) is showing signs of life. Extreme pessimistic sentiment and oversold signs appear to have enticed some buyers back into the market.
BTC’s relief rally peaked on Sunday when it surpassed $30,000 for the first time. According to Arcane Research, the weekend price increase was bitcoin’s biggest daily gain since March, with the price up 7.8%.
Meanwhile, on Tuesday, most alternative cryptos (altcoins) underperformed bitcoin, indicating that traders are still hesitant to take on further risk. After breaking above a yearlong decline on May 13, Bitcoin’s market cap relative to the total crypto market value has climbed in the last three days. Because of their increased risk profile, altcoins typically underperform BTC in down markets.
Even so, as gloomy emotion began to fade, some altcoins gained on Tuesday. Cardano’s ADA token and Axie Infinity’s AXS token, for example, have risen by up to 15% in the last 24 hours, compared to a 4% growth in BTC.
On the other hand, Avalanche’s AVAX token fell 3% on Tuesday, while Monero’s XMR token fell 4%. Despite the recent respite in risk-off circumstances, trading conditions in cryptos and stocks are still tumultuous.
BTC’s price surge on Sunday sparked the greatest increase in short liquidations since May 11. This could indicate a short squeeze, which occurs when traders who are short Bitcoin rush to finish off their holdings when the price increases abruptly.
When a trader’s leveraged position is forced closed by an exchange as a safety mechanism due to a partial or total loss of the trader’s initial margin, liquidations occur. This is mostly seen in futures trading.
Bounce after being Oversold
According to several indicators, Bitcoin and other cryptocurrencies are severely oversold. The cyclical momentum indicator of MRB Partners is the most oversold since the crypto bad market of 2018. This could indicate a short-term uptick in cryptos.
Even though prices are in a decline, momentum indicators might remain oversold. A cross above oversold criteria can sometimes signal a positive price move, similar to what happened at the end of prior bear markets. It can take a few weeks for that to happen.
The recent price increase has some experts skeptical. “While it’s possible that BTC will continue its reversal after posting its first green weekly candle in ten weeks,” FundStrat noted in an email.
Despite oversold readings, MRB released a research last week that outlined a number of macroeconomic concerns that could weigh on bitcoin’s price. BTC’s slide since November has corresponded with tighter liquidity circumstances, a drop in worldwide negative yielding debt, and reduced sums of cash held in money market funds and savings deposits — a full reversal of the crypto and stock boom years.
Institutional Interest in Bitcoin Increased Amid Global Banking Crisis; Says Bittrex CEO
The CEO of Bittrex Global, Oliver Linch recently disclosed that institutional interest in Bitcoin has arrived. Linch added that he is anticipating more adoption, stating that leading financial institutions like Goldman Sachs will soon take on a larger role in crypto.
In an interview with Scott Melker, the head of the crypto exchange clarified that institutional adoption will not hurt cryptocurrency but rather aid the pace of innovation within the industry.
While acknowledging that there may be some painful moments along the way especially as it relates to regulation, Linch however anticipates that many partnerships will be formed between traditional financial institutions and those in the crypto sector which will be good for the crypto industry.
Speaking further, Linch also disclosed that during the bear market, many of the financial giants moved to establish crypto divisions within their companies, positioning themselves for the growth of the industry.
“Historically, those big players have been the biggest drivers of innovation. Are they a bit slow to adopt at the moment? Yeah, sure. But actually, the big change will happen when they stop fighting it and we stop fighting them.
“And we start talking about partnering and working together. Show them a way that it can be done and it can make them money and I guarantee you they won’t stand in the way of that. They’ll be pedal to the metal to exploit that opportunity.” Linch said.
Investors King earlier reported that bitcoin is up by 50% this year and it has outperformed major stock indexes and commodities despite the collapse of major crypto-related banks.
A report made by Goldman Sachs shows bitcoin as the best-performing investment asset in the world since the beginning of 2023, outperforming gold, the S&P 500 and the Nasdaq 100.
Bitcoin has so far enjoyed a remarkable year. From a low of $16,000, the flagship cryptocurrency is currently trading at $28,154. Data from Binance platform shows.
Bitcoin Surge to 9-Month High Amid Banking Turmoil
Bitcoin has surged to a 9-month high amid the banking turmoil in the United States. The flagship cryptocurrency is up by 50% since the beginning of 2023, trading at $27,779 at the time of writing this report.
Investors King earlier reported that the crypto mobile applications also increased by 15 per cent due to the uncertainty surrounding the US banking sector following the collapse of three big banks in the United States. It would be recalled that Silvergate, Signature and Silicon Valley Banks were shut down last week due to issues related to liquidity.
Investors and crypto experts have extolled the resilience of Bitcoin amid the banking crisis last week. They noted that bitcoin is trading at its lowest correlation to stock in months. Thereby making the most capitalised cryptocurrency a valuable alternative asset.
For instance, the Head of Ark Investment, Cathie Wood said “Indeed, during the last week, crypt assets behaved like safe havens: along with gold”.
Meanwhile, Bitcoin continued to hold firm during the early trading hours on Tuesday (today) while other crypto assets were trading lower. Traders across the globe are looking at the US Federal Reserve’s interest rate hike as its two-day FOMC meeting begins today.
Similarly, there has been an additional confidence boost in the global banking sector following Sunday’s announcement that Swiss banking giant UBS agreed to buy its crisis-hit rival Credit Suisse in an emergency deal worth over $3 billion.
Several largest central banks, including the Federal Reserve, the Bank of England, and the European Central Bank, also came together on Sunday to announce “coordinated action” to enhance liquidity in their standing U.S. dollar swap arrangements.
Interestingly, experts have predicted that bitcoin would benefit from central bank efforts to bolster liquidity in the global financial system. Bitcoin rose to a record of $69,000 in November 2021 after central banks and governments launched unprecedented monetary and fiscal stimulus measures.
Bitcoin Jumps Above $24,000 in Minutes Following Joe Biden’s Speech
Following Joe Biden’s speech, the world’s most capitalised cryptocurrency, Bitcoin jumped above the $24,000 mark in minutes.
In a widely televised speech, the U.S. president assured that the American banking system is “safe.”
Immediately after the news, Bitcoin surged by 6%, adding to the gain it has already recorded. Investors King earlier reported that digital assets across the cryptocurrency market are trading in green following Binance’s announcement that it plans to convert $1 billion to BTC, BNB and Ethereum.
After briefly touching $24,500, the flagship cryptocurrency exchanged hands at $24,170 as of the time of writing this report. Additionally, many of the alternate coins including Ether (ETH), Binance Coin (BNB), and Cardano (ADA), also responded positively to the announcement.
It would be recalled that the recent collapse of Silicon Valley Bank (SVB) and Signature Bank (SB) has caused severe panic, with some predicting a further decline in the banking sector.
In the highly anticipated speech, the President of the United States, Joe Biden, stated that Americans should have confidence in the local banking system, describing it as “safe”. He also assured that customer deposits remain available.
The United States President however noted that taxpayer funds won’t be used to bail out Silicon Valley Bank and Signature bank. He clarified that the money would come from the fees that banks pay into the Deposit Insurance Fund.
“Every American should feel confident that their deposits will be there, if and when they need them,” Biden said.
Meanwhile, the upward rally which has seen most of the cryptocurrencies recording double-digit gains has renewed interest in the once-abandoned digital currencies.
Similarly, the total cryptocurrency market capitalization has climbed back to $1.09 trillion, gaining 12% in the last 24 hours.
Experts have posited that once bitcoin breaks the $25,000 a coin resistance level, the digital currency will set a new mid-term record year.
However, a senior analyst at Investors King Ltd, Samed Olukoya described the recent surge in cryptocurrencies value as artificial, largely instigated by $1 billion expected to be injected into the space by Binance. To sustain the bullish run, institutional investors need to start investing in the space again.
“$1 billion additional liquidity in a market with almost $1 trillion capitalisation won’t do much without sustenance.”
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