Why Is The Bitcoin Price Up Today?
March 29 2023 - 4:35AM
NEWSBTC
The Bitcoin price continues its upward trend, defying bad news,
most notably the Commodity Futures Trading Commission (CFTC) filing
a lawsuit against Binance. While BTC dropped 5% within an hour of
the news, the bulls have already erased those losses. In light of
the Binance lawsuit and the hawkish stance of the US Federal
Reserve (Fed) at the last FOMC meeting, the Bitcoin price is
showing remarkable resilience. Despite the negative news, Bitcoin
is managing to shake it off relatively quickly, indicating the
relative strength of the bulls. In the medium term, this supports
the case for higher BTC prices, with the $28,800 area remaining the
key resistance zone. On Friday, the release of the Personal
Consumption Expenditures Price Index (PCE) in the US is likely to
provide a key signal for the market. The PCE is the Fed’s favored
inflation gauge and could provide major volatility once again
depending on the data. The reasons for the current Bitcoin price
rally are various. Macro Outlook And A Potential Fed Pivot During
the last FOMC meeting, the US central bank published its
projections for interest rate policy this year (dot plot) and
predicted no rate cuts. In the past week, the Fed has repeatedly
stated that it does not expect any rate cuts in 2023. Related
Reading: CFTC Vs. Binance: Cumberland Outlines 3 Scenarios For
Bitcoin And Crypto However, financial markets are calling this a
bluff. As the analysts of The Kobeissi Letter note, analysts see a
50/50 chance of a 25 basis point rate hike in May. However, the
futures still call for at least three rate cuts by December 2023.
Bitcoin is known to be a sponge that soaks up loose monetary
policy. Accordingly, Bitcoin investors seem to be maintaining their
bullish stance at the moment, despite the CFTC lawsuit against
Binance. DXY Provides Bullish Environment For Bitcoin Probably also
supporting the price at the moment is the continued weakness of the
US Dollar Index (DXY). The fall of the DXY from 105.94 on March 7
to now only 102.68 is undoubtedly providing a tailwind for the
Bitcoin price. Another drop towards the yearly low under 101 will
likely further fuel the Bitcoin price without a doubt. Traders
should therefore keep an eye on the DXY due to the inverse
correlation. Persistent Banking Crisis Boosts BTC Also bullish for
Bitcoin is the ongoing banking crisis in the United States. As
NewsBTC reported, more than $2.5 trillion in commercial real estate
debt will come due over the next five years, with smaller banks
holding 70% of commercial real estate loans. Elon Musk called this
the “most serious looming problem” in the banking system. Related
Reading: Bitcoin Repeating This Price Pattern Of Late 2019? Watch
This Meanwhile, US President Joe Biden admitted yesterday that the
US banking crisis is “not over yet.” Smaller banks in particular
continue to be the focus of the crisis. As renowned analyst Rany
Woodward explained via Twitter, deposits of small banks that are
not among the 25 largest banks fell by $125 billion last week, of
which $65 billion was accounted for by the 25 largest banks. “NOT
good for communities as small community banks will have to tighten
credit availability,” Woodward wrote. Short Liquidations Drive
Bitcoin Higher On the support side, the bulls were able to parry
any sell-off attempt by the bears yesterday. Bitcoin tested and
held the key support for the current momentum at $26,800 in the
smaller time frames. On a breakdown, the first bearish target would
have been at around $25,300. However, the bulls have had the upper
hand, leading to major short liquidations in the Bitcoin market –
although thin liquidity may also have contributed to the swift
move. Thus, a classic short squeeze has propelled BTC in explosive
move to a new five-day-high today. According to Coinglass data,
about $60 million in shorts were liquidated today in the overall
crypto market, $27.5 million in Bitcoin. However, analyst Skew is
warning: BTC Binance Spot Heatmap: Thick ask liquidity between $28K
& $30K Would need some sizeable market buying to push through
here. At press time, the BTC price was at $28,515, eyeing the
resistance zone at $28,800. Featured image from iStock, chart from
TradingView.com
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