Cryptocurrency Market March 14 CHK: Bitcoin surpasses 24,000, altcoins surge as US stocks fall for the 5th session

Bitcoin bounced more than 8% on the day, breaking through the $24,000 region while US stocks were on fire amid a widespread banking crisis.

Cryptocurrency Market

Bitcoin (BTC) is currently trading around $24,700 up over 10% over the past 24 hours. The rally was built when Federal regulators unexpectedly bailed out depositors at SVB.

According to Coinglass, 55,851 traders have been liquidated in the crypto market, with $216.47 million wiped out in the last 24 hours. As for the top crypto asset, 4,300 BTC worth $104.46 million was taken out of the market during that time period, mostly from short positions. Also, during yesterday’s trading session, when the BTC price rose above $24,000, over $81 million of BTC short positions were knocked out of the market.

Furthermore, many BTC investors took advantage of the bull run to profit from their investments.

According to on-chain data provider, Santiment, on March 13, BTC saw the movement of 21,524 BTC back to exchanges. This is the highest daily amount since September 13, 2022.

“Traders are taking profits when they can,” commented Santiment.

While many expect BTC price to regain the psychological $25,000 level soon, the setup on the 12-hour chart suggests its price could soon correct.

At the moment, the price of BTC is trading above the Bollinger Band. While this is a sign that the asset is overbought and the outlook remains bullish, it is often seen as a sign of an exit from the market, as many expect the price to correct at this point.

Additionally, the Relative Strength Index (RSI), located at 69.13, is close to the overbought zone. Once the indicator enters this zone, sentiment will change and many will take it as a sign to exit trading positions, pulling the price of BTC down.

Finally, the Aroon Up Line indicator (orange) is detected at 100%. When the Aroon Up line is close to 100, it shows that the uptrend is strong and indicates a potential trend reversal is possible.

Bitcoin was once considered a safe investment or a low-risk asset, as it is unaffected by fluctuations in global financial markets, similar to gold. Currently, it seems that the largest cryptocurrency by market capitalization is following the lead of Gold. Looking at the charts and the rallies, it seems that Bitcoin and Gold prices may be moving in tandem.

After recovering nearly 18% of the losses it saw in February, Bitcoin is now trading around $24,100. Similarly, Gold also turned down but recovered shortly after, making the trajectory of Gold and BTC seem to be the same.

The expectation that Bitcoin will continue to copy the price action of the precious metal has been well documented by the community. This is a good sign as more analysts are pushing for Gold against fiat. Peter Schiff, analyst and founder of Europac, said:

“Thanks to the Fed bank bailout, all US bank deposits are now at risk. That risk does not come from bank failure, but from inflation. Anyone with savings in the bank should withdraw quickly and buy gold.”

Analyst, Michael, claims that Sunday gold sales at APMEX hit record levels. Therefore, if the buying power of Gold increases, Bitcoin will also have a positive momentum as investors try to protect their money from the banking crisis.

Trading above $24,000 at the moment, Bitcoin price is attempting to head towards the critical $24,943 resistance level. The 18% rally over the past 24 hours has brought BTC close to this area and will likely turn resistance into support.

This will also help Bitcoin price mark a new year-to-date high as well as a nine-month high.

But if the “safe-haven” story forms a fakeout and Bitcoin collapses due to overwhelming pressure from the outside, it could turn down to the $21,410 area. This line acts as a critical support and a slide below it will invalidate the bullish thesis, bringing the price back to $20,000.

The altcoin market continues its rally as BTC spikes to the $24,000 region.

Leading the way is Conflux (CFX) with a stronger 33% gain on the day, erasing all of its losses over the past week. Rocket Pool (RPL) is also one of the altcoins recording double-digit gains in the short-term. Other projects such as Optimism (OP), GateToken (GT), The Graph (GRT), OKB (OKB), ssv.network (SSV), Wrapped Bitcoin (WBTC), GMX… increased sharply from 5-8%.

Ethereum (ETH) also moved closer to the $1,700 area yesterday, setting a local top at $1,693. The asset with the second largest market capitalization is currently trading around $1,672, with a gain of more than 4% over the past 24 hours.

Macro factors

The US stock market fell in trading on Monday (March 13), marking the fifth consecutive decline of the Dow Jones and led by the slide of banking stocks after the crash. of SVB bank last weekend. Banks were also sold off in global financial markets in the first session of the week, and the overwhelming risk aversion caused oil prices to drop more than 2%.

At the close, the Dow Jones dropped 90.5 points, or 0.28%, to 31,819.14 points. The S&P 500 index fell 0.15% to 3,855.76 points. The Nasdaq index rose 0.45% to 11,188.84 points.

The MSCI All Country World Index, which measures stock markets in 49 countries around the world, fell 0.39%. European stocks were the biggest losers in the region this session, with the Stoxx 600 index falling 2.3%.

A gauge of bank shares in Europe fell nearly 6% after falling 3.8% in Friday’s session. London-listed HSBC shares fell more than 4% after the bank announced it was buying the British branch of SVB for £1.

Shares of banks in the US region plummeted, led by a nearly 62% drop in First Republic Bank, as efforts by authorities to reassure the safety of the system were not enough to convince investors. peace of mind.

At the weekend, the US Federal Reserve (Fed) and the US Treasury announced measures to stabilize the banking system and said that depositors at SVB could access their deposits from Monday. . In addition, the Fed also injects more liquidity into the system by providing 1-year loans to depository institutions, with US Treasury bonds and other securities as collateral. The key, analysts say, is that the Fed accepts these collateral at face value, rather than market valuation, to allow banks to borrow without having to sell assets at a fraction of the cost. loss price.

The collapse of SVB is the second largest bank failure in history in the US, occurring as high interest rates in the country and a squeeze in venture capital make the bank specialize in serving this technology startup. sudden loss of liquidity.

Swiss financial watchdog FINMA announced on Monday it would analyze any potential risks to the country’s banks and insurers.

The risk of spillover from SVB pushed fear in the global financial markets higher and made investors buy strongly in safe assets such as gold and US Treasuries.

“We are seeing the classic case of the safe-haven race. Interest rate hikes and a slowing economy always have a negative impact on the market,” Nedgroup Investments chief Tom Caddick told Reuters news agency.

In the last week, there have been three consecutive failures of US banks, from Silvergate Capital, to SVB and Signature Bank. Amid such volatility, traders are sharply reducing their bets on a 0.5 percentage point Fed rate hike at next week’s meeting. Instead, they think the Fed will choose a 0.25 percentage point jump. There are even those who predict the Fed will not raise interest rates.

“Many Fed policymakers actually have a soft view, while the pressure on inflation remains strong. I think the upcoming economic data will make the picture even more complicated for the Fed,” senior analyst Edward Moya of data and analytics firm Oanda told Reuters, referring to the report. The consumer price index (CPI) report is scheduled for release on Tuesday and the producer price index (PPI) on Wednesday.

In a report, Goldman Sachs bank said that the Fed will not raise interest rates at its meeting on March 22.

According to TD Securities chief strategist James Rossiter, volatility in financial markets should subside once central banks, including the European Central Bank (ECB), the Fed and the Bank of England (ECB), ) takes the next step.

“Banks that have not been affected by this volatility may become more cautious with lending, causing financial conditions to tighten, thereby reducing some of the work of the Fed,” Mr. Rossiter forecast. .

Due to the sharp increase in the price of short-term US Treasuries, yields fell deeply. Two-year yields fell below 4% for the first time since October 2022 and marked their steepest drop since October 1987, before Monday’s market crash. Black Friday (Black Friday).

The ECB will meet on Thursday this week, is forecast to raise interest rates by 0.5 percentage points and signal further tightening in the near future.

On the energy market, the price of Brent crude oil futures fell by $2.01/barrel, or up 2.4%, to $80.77/barrel. WTI oil price fell by 1.88 USD/barrel, or 2.5%, to 74.8 USD/barrel. During the session, Brent oil prices hit their lowest level since January and WTI oil prices hit their lowest since December.

“What we’ve seen over the past week is just the first consequence of policy tightening,” Evercore ISI analyst Julian Emanuel told CNBC. “We will have a recession, maybe a mild recession. The market could retest the lows of October last year, but that would be the buying opportunity we’ve been waiting for for the past two years. That will usher in a new bull market.”