Bitcoin price has been on a bullish trend throughout 2023 in the wake of historic bank waves, but was recently rejected from above the key $30,000 level.
However, the top cryptocurrency is now up more than $1,000 on the day to more than $28,000 per coin after First Republic Bank shares crashed. A retest of previous levels along with a new narrative could be very bullish for Bitcoin. Here is a closer look at how the ongoing crisis in the banking sector could underpin increasingly positive price action.
Bitcoin Reclaims $28,000 But Is There More Upside?
In the past few months, traditional banks have been grappling with liquidity issues and bankruptcies, and Bitcoin has been a huge beneficiary of this trend. In early March, Silicon Valley and others saw massive bank withdrawals.
As a result, BTCUSD is up more than 40% in just a few days. Now, with First Republic Bank shares plummeting, and more than $100 million in deposits fleeing the bank, bitcoin is up again.
Although the $1,000 move is notable in itself, a retest of Bitcoin and holding an important support line could instill confidence in the cryptocurrency bulls to drive the price higher. The withdrawal will also be less noticeable. Surface corrections are a sign of buying and demand pressures
Bitcoin hitting new highs in 2023 could also signal that the crypto winter is over and things are heating up in the coming weeks.
Bank runs lead to Bitcoin rallies | BTCUSD on TradingView.com
The first failure of the Republic Bank risk, reigniting a new cryptocurrency narrative
First Republic Bank’s share price drop is due to a negative first-quarter earnings report. The bank revealed that more than $100 million of deposits were withdrawn in the first quarter.
CEO Mike Roffler announced that the bank will “pursue strategic choices” and “take steps to actively reduce our expenses to align with our focus on reducing balance sheet size.” The bank will lay off up to 25% of the workforce, cut executive level salaries, and much more.
Charles Gasparino at Fox Business News Claims Bankers expect government guarding of First Republic Bank because “private solutions” fail to interest buyers or investors.
With traditional banks still facing financial crises, investors are turning to bitcoin as a hedge against financial system instability. This phenomenon highlights the growing acceptance of Bitcoin as a store of value and a reliable investment.
The narrative of BTC outperforming the banks could be just what the market needs. Holding current levels and testing previous levels could be very bullish for bitcoin, which could lead to further price hikes in the future.
Bitcoin is making another inroads #FirstRepublicBank pic.twitter.com/XNaaEUL4Aq
– Tony “The Bull” (tonythebullBTC) April 25, 2023