Bitcoin price is higher today as the first shock of the SVB crisis leads to BTC price gain above $20,000. how can BTC/USD fare now?
Bitcoin:
BTC:
tickers down
$26216
price rose on March 11 as cryptocurrency markets stabilize after panic over a potential banking crisis.
Data from Cointelegraph Markets Pro and TradingView show that BTC/USD has crossed $20,300 at the time of writing, with the pair up 2% on the day.
After threatening to lose $20,000 as support, bulls are trying to hold on to some key trend lines as weekend trading offers an opportunity for increased volatility.
However, uncertainty remains in the air as the fallout from the collapse of SVB Financial is far from over;
How is Bitcoin recovering and how is the short-term BTC price outlook shaping up for traders? Cointelegraph takes a look at why Bitcoin is winning.
Crypto markets deserve the SVB crisis
After sending a similar alarming signal to Silvergate Bank, Silicon Valley Bank (SVB) and its parent company SVB Financial managed to cause a lot of panic in the crypto markets.
As liquidity concerns piled up, Bitcoin sent the crypto down to multi-month lows. Contagion from SVB, the 16th largest commercial lender in the United States, to other banks at home and abroad adds to the pressure.
A day later, however, the dust seems to have settled.
The initial shock of yet another bank failure caused a cascade of selling among traders, but the latest data suggests the picture is stabilizing and a relief rally is underway.
“Volume is coming, think it could happen by the end of March if not earlier,” noted commentator IncomeSharks in a piece of analysis on the recovery. Meanwhile, Trader Alan, also known as Trader Tardigrade, compared the current price action to 2016. On Twitter, he described Bitcoin’s performance as a “recalculation before takeoff.”
However, some market participants believe that a new local low will occur over the weekend, with Crypto Tony betting on BTC/USD below $19,200.
“There’s a lot of drama going on in the white box of the BTC Daily chart,” continued Keith Allan, co-founder of monitoring tool Material Indicators, of his own findings.
“The price has dropped into the local R/S Flip range, has broken down from the 200-day MA to retrace the 100-day MA, 2017 Top and Trend Line, but the 20-day MA, which the 50-day crossing period, suggests that the pump may be short.
The USDC drama has cooled
Part of the SVB failure that the markets are currently dealing with is regarding stablecoins, especially Circle’s USD Coin.
USDC
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$1.00
, the second largest stablecoin by market cap.
After Circle revealed that SVB had swallowed some of its cash reserves to support USDC, USDC began to fall against the dollar, still trading at $0.915 at the time of writing.
While that event initially put new selling pressure on Bitcoin and altcoins, this was also temporary.
Even when other stablecoins began to lose their dollar peg, the contagion failed to spark a significant new surge in sales.
In response, one theory suggested that if the timing had been different, the USDC peg would have already reversed.
“If this wasn’t the week, arbitrageurs would buy spot market USDC and return it 1:1 through the circle and return the bond,” says a former Bitcoin miner and derivatives trader known as Cyborg Psyops Layers on Twitter. to whom
“The problem is that the banks are now closed and there are too many monkeys selling USD dollars on spot markets. I would classify this situation as an overreaction. I buy 85c USDC. I understand the risk.”
He added that USDC should not trade below $0.92 based on what happened.
Market commentator Tedtalksmacro, meanwhile, saw signs that the USDC would survive and not follow the SVB into a capitulation downward spiral, despite the connectivity issue.
“I can never be sure about crypto, but it looks good. 8.25% of Circle’s reserves remain … leaving 91.75% of their funds liquid,” he tweeted overnight.
“Even if funds are completely lost, Coinbase will act to ensure that the USDC market reaction appears to be pure panic, driven by recent bias.”
