In the past few days, Bitcoin investors and traders have faced strong profit-taking, resulting in a slight drop in the global crypto market cap.
Adding to the fear, uncertainty, and doubt were the previous collapses of crypto-friendly banks Silvergate and Signature, as well as venture capital bank Silicon Valley Bank. However, bulls found their footing as BTC led the market in a rally once again.
According to CoinGecko as of this writing, the king of crypto is up nearly 10% in the past 24 hours, breaching the $25K level which, if the momentum permits, would allow BTC to hit a higher price target in the next few days or weeks.
With crypto-related equities and crypto itself rallying, investors and traders will surely enjoy the weekend with some gains.
TradFi Sentiment Flips Positive To Crypto
Traditional financial institutions are still strong players in the crypto industry. Big names like Blackrock, BNY Mellon, and JP Morgan invested in crypto companies, inciting local rallies that spur investors into holding their portfolios.
This can be seen in the current market environment. With the US Federal Reserve announcing that they’ll cover SVB’s customer deposits, sentiment in crypto flipped from bearish to bullish within a matter of days.
The subsequent collapse of multiple banks in under a month also spurs doubts about how rigid the banking system really is.
Due to this, it may not be likely that the Fed would raise interest rates once again amidst current market headwinds.
The recent price movement of Bitcoin is caused by this anticipation that the US central bank would ease its hawkish behavior to support the broader financial market.
March 22 will be the date the Fed would decide whether to raise interest rates by 25 basis points. If they decide to raise it despite the anxiety surrounding the banking system, we might see pain come to both equity and crypto markets.
Bitcoin Bulls Should Keep An Eye On Fed Actions
Investors are currently taking advantage of the recent price swing to capture some profits. At the time of writing, the token is trading with a red candle, a strong signifier that investors are willing to sell rather than hold for the long term.
BTC total market cap at $530 billion on the daily chart at TradingView.com
Bitcoin bulls should monitor the Fed’s announcement on March 22nd, as this could affect sentiment surrounding crypto. With this in mind, holding the current support line at $24k will give investors a launch pad in case the token’s price drops.
The next target for the bulls in the medium to long term should be $30k. If they flip this resistance to support, they could practically target the April 2022 range of $37,000 plus.
-Featured image from Smithsonian Magazine