Bitcoin surges to $26,500, its highest price since June 2022
|Get all the essential market news and expert opinions in one place with our daily newsletter. Receive a comprehensive recap of the day's top stories directly to your inbox. Sign up here!|
(Kitco News) - The cryptocurrency market continues to surprise to the upside as Bitcoin’s (BTC) price surged above $26,000 in the early trading hours on Tuesday despite the latest Consumer Price Index (CPI) data showing that inflation remains persistently high at 6% year-over-year.
Stocks rallied following the CPI print as the data aligned with expectations, and regional bank stocks rebounded, managing to claw back some of the losses that arose in the wake of the Silicon Valley Bank fallout. At the close of markets, the S&P, Dow and Nasdaq all finished higher, up 1.68%, 1.06%, and 2.14%, respectively.
Data provided by TradingView shows that Bitcoin bulls stampeded their way to a daily high of $26,514 in the early hours on Tuesday, but saw their momentum fade in the afternoon, which gave bears a chance to smack the price back below $24,200.
BTC/USD 4-hour chart. Source: TradingView
As a result of the early morning surge, “April Bitcoin futures prices hit a three-week high in early U.S. trading on Tuesday,” according to Kitco senior technical analyst Jim Wyckoff, who added that “Bulls have regained the near-term technical advantage as a price downtrend on the daily bar chart has been soundly negated this week.”
Moving forward, “The path of least resistance for prices is now sideways to higher,” Wyckoff said.
Additional insight into the reason behind the move was offered by James Lavish CFA, Managing Partner at the Bitcoin Opportunity Fund, who noted that “We’ve seen Bitcoin act as the leading risk-on asset for the last two years, in particular. The tip of the risk spear, so to speak: It has been the first to move higher when the sentiment turns to risk-on and the first to move lower when sentiment shifts to risk-off.”
Lavish noted that market participants have been expecting the Fed to continue raising rates until either unemployment spikes, inflation drops significantly, or something (particularly in the bond or credit markets) breaks, which might have just happened with the collapse of Silicon Valley Bank.
“With the Fed and Treasury scrambling to shore up markets this weekend, they have effectively admitted that something broke, Lavish said. “And so, investors believe that the Fed has taken a 50bp hike off the table for next week, and at worst there will be a 25bp hike, and perhaps no more hikes at all.”
Bitcoin, which trades 24/7, was able to benefit from the recent developments and “harness this sentiment and move to risk-on before all other assets,” he added. “Couple that with the *reason* for the move, i.e., fiat manipulated money system failing, and we have an additional boost of a flight to the safety of truly decentralized, hard digital asset of Bitcoin. There is no worry of fractional reserve banking impact on any savings that is stored in Bitcoin."
Looking for a March close above $24,800
According to analysts at Technical Roundup, Bitcoin now finds itself trading above the monthly resistance at $23,300 and the weekly resistance at $24,300.
“If this price action is cemented by a high time frame candle close, and/or as long as there is no acceptance back below the mid-$20,000s, this move will constitute a breakout from a multi-month range,” the analysts wrote. “Breakouts are bullish until they aren’t.”
BTC/USD 1-week chart. Source: Technical Roundup
Based on this assessment, Technical Roundup’s “bias is bullish until either $30,000+ is reached (resistance) or the market finds acceptance back below $23,000-$24,000 (failed breakout).”
In the event that the current strength displayed by the market persists, “the only way to establish a position is via intraday pullbacks, lower time frame ranges, short-term open interest flushes, short-term trend-following tools, and the like,” they said.
Crypto market analyst Rekt Capital provided a similar analysis on the monthly performance of BTC and noted that a March close above $24,800 will confirm a breakout above the macro downtrend that has been in place since November 2021.
As long as #BTC Monthly Closes above ~$24800, price will confirm the breakout beyond the Macro Downtrend$BTC is at ~$26000 now— Rekt Capital (@rektcapital) March 14, 2023
So far, so good#Crypto #Bitcoin pic.twitter.com/nkRBcGfDAi
And in response to BTCs afternoon pullback below $25,000, Eight Global founder Michaël van de Poppe tweeted that he is “Not interested in buying this retest at $25K,” but is instead looking for a deeper pullback to “$23.3K for bounce-play longs.”
Altcoins surge higher
The altcoin market benefited greatly from the surge in Bitcoin price, with all but a handful of tokens in the top 200 in the green for the day.
Daily cryptocurrency market performance. Source: Coin360
RSK Infrastructure Framework (RIF) is the biggest gainer for the day, with its price increasing 37.47% to $0.174, followed by a 36.84% increase for Centrifuge (CFG) and a 32.11% gain for SingularityNET (AGIX).
The overall cryptocurrency market cap now stands at $1.11 trillion, and Bitcoin’s dominance rate is 43.9%.