It seems that the Bitcoin (BTC) price is reacting positively to the worsening banking crisis in the United States.
This crisis, which was triggered by a combination of factors such as rising inflation, political instability and a struggling economy, has led to an increase in demand for alternative stores of value such as bitcoin. Indeed, looking at the price curve of Bitcoin since the collapse of Silicon Valley Bank on March 10, the crisis in the U.S. banking sector appears to be benefiting cryptocurrencies.
On March 23, Bitcoin was trading at more than $28,500, an increase of more than 30% over 14 days, according to CoinGecko.com.
It’s early May 2023, and as traditional financial institutions struggle to cope with the crisis, one wonders if many investors are turning to bitcoin?
Are investors turning to bitcoin?
For the record, shares of other banks such as PacWest Bancorp (PACW), Western Alliance Bank (WAL), and Metropolitan Bank (MCB) did indeed fall sharply yesterday on the stock market.
U.S. banks in turmoil on the stock markets that must cope with the sharp decline yesterday in their share prices:
- PacWest, PACW: -30
- Western Alliance, WAL: -25
- Metropolitan Bank, MCB: -21
- HomeStreet, HMST: -15
- Zions Bank, ZION: -10%.
In the face of this banking environment in crisis, the Bitcoin price rebounded yesterday near $29,000, after having briefly fallen below $28,000.
From a technical point of view, on the weekly scale, we can see that the price of BTC remains in a bullish configuration. Indeed, the price is currently moving in an ascending channel, more precisely on the median line. If bitcoin (BTC) respects this pattern, the current correction should not lead to a drop far below $26,556.
Moreover, this level aligns with the 50-week moving average. Thus, this area could act as a major support for BTC. If this is confirmed, the value of bitcoin (BTC) could explode higher once this support is reached.