- Bitcoin’s price remains relatively close to $28,000.
- Buyers drove Ethereum above the $1,800 resistance but were unable to maintain the higher levels.
- The fear and greed index for cryptocurrencies has risen to its highest point of the year. With a score of 66/100, the Crypto Fear and Greed Index has entered the greed zone.
- Last week, Arbitrum developers announced an airdrop of ARB on March 23.
- Since January 2023, Coinbase stock has increased by more than 100%.
- The Federal Reserve’s decision to raise interest rates on March 22 will be the next market trigger.
- The Fed’s ability to maintain interest rate increases has been questioned in light of the developing banking crisis. Nevertheless, the Fed is in a difficult situation. Raising rates would punish the economy more and possibly trigger a new wave of bank failures while controlling inflation.
Bitcoin has begun the new week in a strikingly bullish manner, surpassing $28,000. Crypto markets continue to rise as a result of the ongoing banking crisis in the United States and elsewhere. Following a week of chaos for macro markets and solid gains, Bitcoin and altcoins are circling levels not seen in nine months. The bear market of 2022 is becoming a distant memory as old resistance levels crumble and bulls attempt to cement newly reclaimed support. This week, as with the previous one, there are numerous potential roadblocks to overcome. The Federal Reserve will make its next interest rate decision, and new macroeconomic data will be released. As a result, markets are likely to remain volatile, and any further unexpected events from the banking sector will only add to the uncertainty. Simultaneously, Bitcoin’s own ecosystem is poised to become stronger than ever as network fundamentals reach new all-time highs.
The S&P 500 index (SPX) rallied from 3,808 to 3,935, but the bulls were unable to break through the 3,962 resistance. The US Dollar Index (DXY) has been trading near 104 and has struggled to stay above that level. The Fed’s decision to raise interest rates on March 22 is without a doubt the biggest event of the week. The Federal Open Market Committee’s (FOMC) current quantitative tightening strategy, in place for the previous 18 months, is facing a serious challenge. The Fed’s ability to maintain interest rate increases has been questioned by the developing banking crisis; some commentators contend that this policy was the death knell for struggling regional banks. Nevertheless, the Fed is in a difficult situation. Raising rates would punish the economy more and possibly trigger a new wave of bank failures while controlling inflation. With no one really knowing what will happen, this week’s FOMC is shaping up to be one of the most interesting ones in a while. Chances are that 25bps will happen as per the rate hike probability.
The Crypto Fear and Greed Index has risen dramatically:
The crypto market’s sentiment is the most uplifting it has been since around the time Bitcoin reached its all-time high almost 16 months ago. The Crypto Fear and Greed Index has reached its highest level this year, surpassing levels not seen since Bitcoin’s all-time high in November 2021. The Fear & Greed Index is currently indicating a significant shift from fear to greed in the cryptocurrency market, with a score above 68, which was last seen during the bullish period in November 2021, shortly after Bitcoin reached its all-time high of $69,000. This can be attributed to Bitcoin’s outperformance of other asset classes such as stocks, gold, and real estate. While the crypto community appears to be greedy, the stock market is still dealing with the fallout from the crisis.
The Federal Reserve (Fed) said on Sunday that it would make more money available through a new programme called the Bank Term Funding Program. This programme would give loans to depository institutions for up to a year, backed by Treasury securities and other assets that these institutions already own. Currently, the market is pricing in a nearly 80%+ chance of the Fed maintaining its current rate and a 20% chance of a 25 basis point increase. Before the SVB collapse, however, the market had a 60% chance of a 50 basis point increase priced in.
Bitcoin Price Analysis:
Bitcoin has been trading above the breakout level of $24,719 for the past week, which is a good sign. The next major resistance zone is between $27,812 and $31,500. If the price falls below the current level or the overhead resistance, the key level to watch is $25,500. If the price bounces off this level with strength, it indicates that bulls have turned $25,500 into support. Following that, the level will serve as a floor during future declines.
Concluding Thoughts:
Bitcoin keeps trading near $28,000, which shows that investors are still interested even though the traditional banking system is struggling with unprecedented volatility. The takeover of the ailing Credit Suisse bank by UBS on March 20 boosted European equity markets, but not everyone is pleased with the deal. According to the Swiss Financial Market Supervisory Authority, the value of additional tier-one bonds will be written down to zero, wiping out $17 billion in investments for AT1 bond investors. Among the turmoil in the global banking sector, Bitcoin has shone brightly, as traders appear to have shifted their focus to the alternative to the legacy banking system. Another factor in Bitcoin’s favor is that it has decoupled from the US equity markets and is behaving as an uncorrelated asset class. Goldman Sachs has named Bitcoin the best best-performing this year, with a 51% year-to-date absolute return. In a March 17 note, the asset manager revealed that Bitcoin’s total returns YTD have outpaced those of information technology, gold, the NASDAQ 100, and the S&P 500, among others.
