Bitcoin’s price surged on Sunday, coming close to $28,000 on various crypto exchanges after breaking the $27,500 key psychological level earlier in the day.
At press time, the groundbreaking cryptocurrency was trading at $28,080, up about 8% over the past 24 hours. Ether followed closely, rising over 5% to trade at $1,813 at press time. Interestingly, year-to-date BTC and Ether are up 60% and 45% respectively, recovering all losses since the start of 4. quarter 2022.
Other cryptocurrencies also benefited from the surge, with XRP, BNB and Cardano adding over 5% over the same period. The massive boost triggered over $164 million worth of liquidations in the last 24 hours, with over 45,000 card traders caught in the crosshairs, according to data from Coinglass.
The broad recovery in crypto markets comes amid macroeconomic headwinds that have directly affected the sector. Last week’s combined implosion of Silicon Valley Bank (SVB) and Signature Bank caused a sharp drop in cryptocurrencies, with calls to de-bank crypto-related firms mounting from various regulators.
The intervention by the US Treasury and the FDIC to ensure that all depositors in the two money-beleaguered banks would be made whole, however, stabilized the markets, with major crypto assets recovering.
After the recent banking crisis, the FED started pumping its balance sheet for the first time since it started raising interest rates. On March 15, the FED provided $297 billion in emergency funds to prevent further contagion to the banking sector. This appears to have sparked a massive shift to crypto as more investors see the sector as a haven to stave off a scenario similar to the 2008 global financial crisis.
“Four large banks have gone bankrupt. At first it was still said that we will not save the banks. And then they were saved again, like in 2008/2009. Therefore, many people are now looking for a safe haven for their assets. And it’s Bitcoin and altcoins,” market analyst Andreas Muller tweeted.
Meanwhile, ongoing crypto market strength has increased the chances of a recovery rally, according to various investors. “Checkmate,” the lead chain analyst at Glassnode, stated that he expects Bitcoin to be a spot-drive market for some time, suggesting that the asset could rise higher given the “volume of leverage, and even casino sites that we flushed out last year.”
“If we were to break out of this 2015-style bottom, we could very well enter a spot-driven market similar to the 2016+ era,” he wrote.
According to Michaël van de Poppe, CEO and founder of crypto trading firm Eight Global, Bitcoin needs to hold above $26,000 to push higher. However, in a tweet today, the expert stressed that “this push must happen in the coming hours”; otherwise, bearish divergences could trigger a potential reversal.