Crypto momentum returns as Bitcoin price climbs back above $28K
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(Kitco News) - The cryptocurrency market resumed its upward trend on Thursday as investors finally got the memo sent yesterday by Federal Reserve Chair Jerome Powell that the central bank’s rate-hiking campaign may soon be nearing its end amid ongoing concerns about the stability of the global banking system.
And it wasn’t just crypto traders who saw this as an opportunity to enter the markets, as U.S. equities trended higher in early trading, experienced a dip into the red near midday, but managed to close the trading session with a surge higher. At the closing bell, the S&P, Dow and Nasdaq were up 0.44%, 0.42%, and 1.01%, respectively.
Data from TradingView shows that after reversing course from its dip below $27,000 on Wednesday, Bitcoin (BTC) climbed higher throughout the trading day to hit an intraday high of $29,000 before pulling back to support at $28,300, which has been a consistent level of support for the past week.
BTC/USD 4-hour chart. Source: TradingView
Despite yesterday’s dip, “April Bitcoin futures prices traded higher in early U.S. trading Thursday,” according to Kitco senior technical analyst Jim Wyckoff, who noted that there was “Not much new” since prices hit a contract high on Monday.
“Bulls still 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.”
The re-emergence of Bitcoin’s safe-haven status
Further insight into the resilience of the crypto market was provided by Youwei Yang, Chief Economist at BTCM, who highlighted yesterday’s decision by Fed Chair Powell and European Central Bank head Christine Lagarde to stick to their plan of interest rate hikes “despite market uncertainty and especially banking sector turmoil.”
“The narrative of Bitcoin as the Safe Haven emerged again, as traditional finance (TradFi) faces instability in the high-interest rate environment,” Youwei said. “The mind battle between Crypto and TradFi is again highlighting the benefits of self-managed money (wallets and DeFi) rather than having someone (banks or fund managers), especially for high net-worth individuals.”
Youwei highlighted recent statistics that show a large amount of money flowing into the crypto ecosystem – and Bitcoin in particular – from banks in the U.S. and Europe, but suggested that the uptick in regulatory scrutiny from regulators in these regions has diminished some of the momentum. “But still, the mindset is changing gradually and solidly, which is probably what brought the attention of regulators, not coincident timing, FTX crash is probably only part of the reason,” he wrote.
“Therefore, with the narrative and money flow, Bitcoin has been skyrocketing recently, surpassing $28K and only inches away from $29K earlier today, almost doubled from the FTX crash low of $15.8K,” Youwei noted. “This level may sustain for the short term, but what just happened with SEC filing a lawsuit against Justin Sun (TRX founder) may cause some selling pressure if the impact spreads.”
Due to the threat of further global liquidity issues and possible enforcement actions by regulators, Youwei suggested that there may still be one or two more notable drawbacks in the crypto market this year before things ramp up for a bull market in 2024 and 2025.
“That could mean $50-70K Bitcoin as a base case, and >$100K if optimistic,” he said. “Some people calling for $1 million Bitcoin, while I would be more than happy to see it, I don’t think it is realistic given the restriction of money inflow to the sector, such as closing down Signature Bank and limiting other Crypto-friendly banks.”
Altcoins regroup and climb higher
It was an overall positive day for the altcoin market as token prices began to recover from yesterday’s dip while many crypto users celebrated their latest crypto stimulus check care of the layer-two protocol Arbitrum, which launched its ARB token in true crypto fashion – with an airdrop to its early adopters.
Daily cryptocurrency market performance. Source: Coin360
Space ID (ID) was the biggest gainer on the day, climbing 25.51% to trade at $0.5025, followed by a 16.43% increase for Celer Network (CELR) and a 15.4% gain for Mask Network (MASK).
The overall cryptocurrency market cap now stands at $1.18 trillion, and Bitcoin’s dominance rate is 46%.