Bitcoin has once again reached new local heights as it soared past the $25,000 mark, fueled by a pot of events. The surge in price comes amidst a backdrop of increased institutional adoption, a weakened US dollar, and continued economic uncertainty due to the on going bankruns.
So far, Silvergate Bank, Silicon Valley Bank, and Signature Bank have fallen, even though the US Treasury and the Federal Reserve are trying everything to save the sinking boat. Let us dive into the Bitcoin analysis.
Last week Bitcoin dropped below its 200 and 50-day moving averages, a very dangerous point on the Daily chart. The next support levels for Bitcoin were at $18400, $17800, and $15900, with the possibility of dropping to pre-2021 lows if it continues dropping further.
This week, a strange mix of events caused Bitcoin to retrace and break out of the range (Blue Rectangle). News of Silicon Valley Bank crashing sent shivers down investor’s spines, especially because USDC’s Circle had exposure in the Bank to the tune of $3.3 billion. The depeg of USDC to $0.81 sent Bitcoin crashing down.
After the FDIC joined forces with the US Treasury and the Federal Reserve to bail out the bank, Circle was able to recover the money and USDC regained its peg.
Subsequently, more banks began catching the bank run contagion, an event which cemented the ‘Bitcoin over Banks’ narrative. This caused Bitcoin to start rallying.
Bitcoin Next Week
Bitcoin is back over the 200 and 50-day moving averages. This is a safe place to be. As of the time of writing, Bitcoin is trading at $25860, and this is nicely above the blue range.
Bitcoin needs to close the daily candle above this range to confirm a breakout. If Bitcoin breaks out, the next resistance will be at $28,302 and then $32000. So far, the bears have been decimated. But as we have seen in previous analyses, the market is heavily manipulated.
In a time when heavy-impact fundamental news drop on the daily, technical analysis can go so far. While it is good to do technical analysis, always leave room for disruption of the analysis by fundamental news.
For the coming week, Bitcoin is definitely a buy. The more bank fail, the higher bitcoin goes. However, unverified sources suggest March 22/23 and March 31, 2023 may present pain to the markets. A quick look at those dates reveals possible reasons why.
- March 22, 2023 – FOMC Meeting on Interest Rates
- March 28 – 31, 2023 – Possible dates for the XRP Case final ruling.
Keep an eye out and stay safe.
Vincent Munene is a freelance writer and a great blockchain enthusiast. Blockchain has changed his life in terms of financial freedom and in return, he likes to educate people and keep them up to date on everything blockchain. He is a Biochemist by profession and also loves to play the piano.