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Bitcoin hits a 2023 high above $28,500 as investors explore alternatives to banks
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(Kitco News) - Bitcoin (BTC) continues to gain favor among investors amid a spreading global banking contagion, as the top crypto rallied to its highest price in more than nine months on Monday. This came after Swiss authorities announced that banking giant UBS had bought out its distressed competitor, Credit Suisse, for $3 billion.
Meanwhile, U.S. equities climbed higher to start the week, and investors now focus their attention on the Federal Reserve, which is expected to announce whether it will continue to raise interest rates at its policy meeting on Wednesday. At the close of markets, the S&P, Dow, and Nasdaq all finished in the green, up 0.89%, 1.2%, and 0.39%, respectively.
Data provided by TradingView shows that Bitcoin bulls charged to a 2023 high of $28,527 in the early trading hours on Monday before pulling back to the newly established support level at $28,000, where bulls now look to gather reinforcements before attempting to push higher.
BTC/USD 4-hour chart. Source: TradingView
Futures traders appear convinced that BTC price will continue to improve as “April Bitcoin futures prices hit another contract high in early U.S. trading Monday,” according to Kitco senior technical analyst Jim Wyckoff.
“Bulls have the solid near-term technical advantage amid a fledgling price uptrend in place on the daily bar chart,” Wyckoff said, adding, “More upside is likely in the near term.”
Marcus Sotiriou, Market Analyst at digital asset broker GlobalBlock, also noted the performance of Bitcoin futures in a note shared with Kitco Crypto, which is a signal that speculative interest is rising.
“Open interest in Bitcoin futures has hit a yearly high, showing how there is now significant speculative interest in the digital asset trading market,” Sotiriou said. “CoinGlass data tells us that the nominal value of open interest has reached $12 billion - a 7% gain for the month.”
This “shows us that there is huge speculation in the market right now, so we could see a big move in either direction,” Sotiriou added. “Due to the funding rate of most coins flipping green, I am anticipating a flush in the market soon, as a positive funding rate indicates that the positioning in the futures market is mainly aggressive longs – when there is high open interest with aggressive longs, it typically means over-leveraged longs need to be wiped out.”
BTC has firm support around $26,800
According to analysts at Eight Global, Bitcoin climbing into the range from $28,000 to $32,000 is significant due to the fact that this range “was the last range before the price took the elevator down to the basement back in June 2022.”
Moving forward, the top crypto is likely to face stiff resistance “breaking through the EQ area of $29.8-30k, and ultimately $32K, will likely take some time and should give plenty of trading opportunities on the lower time frames,” the analysts said.
BTC/USD 1-day chart. Source: TradingView
“With negative divergences already developing on the 4H timeframe, and the expected volatility surrounding the FOMC each time, we can expect a pullback early this week,” they warned. “Still, whether that pullback will go deeper towards $25 - 25.5k, even $23.6 - 24k, or the price will bounce from $26 - 26.8k right into the above-mentioned key range and beyond will depend on the developments and news we will receive.”
Eight global added that from a purely technical analysis perspective, “the closest confirmed support is at around $26.8k, and resistance above is at around $28k, but we all know that support and resistance often mean little when the market moves on FOMO and fud.”
A pullback in the altcoin market
While Bitcoin has held up surprisingly well in the face of numerous global headwinds, the altcoin market took a hit on Monday, with the majority of tokens in the top 200 seeing red.
Sotiriou was quick to point out that this is a sign of traders taking profits from the recent altcoin rally, which saw a number of tokens reach their highest levels in years.
“Whilst the major altcoins have been performing well, it appears that traders are now taking profits from their recent highs,” said Sotiriou. “It is likely that the market is now looking for the next altcoin to rally and the focus is now shifting away from Bitcoin and towards the altcoins.”
Daily cryptocurrency market performance. Source: Coin360
Notable exceptions to the pullback include Core (CORE), Nervos Network (CKB) and Syscoin (SYS), which managed to post gains of 20.53%, 15.58%, and 12.87%, respectively, in trading on Monday.
The overall cryptocurrency market cap now stands at $1.16 trillion, and Bitcoin’s dominance rate is 46.5%.
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