Bitcoin’s price rose sharply on Sunday, coming close to $28,000 on various crypto exchanges after shattering the $27,500 key psychological level earlier in the day.
At press time, the pioneer cryptocurrency was trading at $28,080, up roughly 8% in the past day. Ether followed closely, surging over 5% to trade at $1,813 at press time. Interestingly, year to date, BTC and Ether have grown 60% and 45%, respectively, recovering from all losses since the start of Q4 2022.
Other cryptocurrencies also benefitted from the uplift, with XRP, BNB and Cardano adding over 5% over the same period. The massive uplift triggered liquidations worth over $164 million in the past 24 hours, with over 45,000 short traders being caught in the crosshairs, as per data from Coinglass.
The broad rally in crypto markets comes amid macroeconomic headwinds that have directly affected the sector. Last week’s combined implosion of Silicon Valley Bank (SVB) and Signature Bank caused a sharp drop in cryptocurrencies, with calls to de-bank crypto-related firms mounting from various regulators.
The intervention of the US Treasury and the FDIC to ensure that all depositors of the two cash-beleaguered banks would be made whole, however stabilized the markets, with major crypto assets recovering.
Following the latest banking crisis, the FED started pumping its balance sheet for the first time since it started raising interest rates. On March 15, the FED provided $297 billion in emergency funds to prevent a further contagion for the banking sector. This seems to have sparked a massive shift to crypto, as more investors see the sector as a haven in averting a scenario akin to the 2008 global financial crisis.
“Four major banks are bankrupt. At first, it was still said that we will not save the banks. And then they were saved again, like in 2008/2009. Therefore, many people are now looking for a safe haven for their assets. And these are Bitcoin and the altcoins,” market analyst Andreas Muller tweeted.
Meanwhile, the ongoing crypto market strength has increased the chances of a recovery rally origination, according to various investors. “Checkmate”, the lead chain analyst at Glassnode, stated that he expects Bitcoin to be a spot drive market for some time, suggesting that the asset could rise higher considering “the volume of leverage, and even casino venues that we flushed out last year.”
“Should we break out of this 2015 style bottom, we could very well re-enter a spot-driven market similar to the 2016+ era,” he wrote.
According to Michaël van de Poppe, CEO & Founder of crypto trading firm Eight Global, Bitcoin needs to hold above $26,000 to push higher. In a tweet today, the pundit, however, stressed that “this push needs to happen in coming hours”; otherwise, bearish divergences could trigger a potential reversal.