Bitcoin’s price has been rising throughout 2023 as a result of prior bank runs, but it has recently been denied from above the critical $30,000 mark. However, the leading cryptocurrency has now increased more than $1,000 intraday to more than $28,000 per coin following the fall of First Republic Bank shares. Retesting earlier levels in conjunction with a new narrative might be incredibly bullish for BTC. Here’s a closer look at how a continuing banking crisis could bolster the increasingly favorable pricing action.
Traditional banks have been battling with liquidity and bankruptcy concerns in recent months, and Bitcoin has benefited greatly from this trend. Silicon Valley Bank and others saw massive bank runs in early March. As a result, BTCUSD has risen by more than 40% in a few of days. As First Republic Bank’s stock plummets and more than $100 million in deposits exit the bank, Bitcoin is once again on the rise.
Although a $1,000 rise is remarkable in and of itself, Bitcoin retesting and holding a critical support level may inspire crypto bulls to drive prices higher. Pullbacks would also become less noticeable. Shallow corrections indicate the presence of buying pressure and demand.
Bitcoin reaching new 2023 highs could also indicate that crypto winter is over and that things will heat up in the next weeks.
The drop in the share price of First Republic Bank is attributable to a disappointing first-quarter earnings report. The bank stated that more than $100 million in deposits were removed in the first quarter. CEO Mike Roffler announced that the bank would be “pursuing strategic options” and “taking steps to meaningfully reduce our expenses to align with our focus on reducing the size of the balance sheet.” The bank will lay off up to 25% of its workforce, reduce executive-level salaries, and do other things.
According to Fox Business News’ Charles Gasparino, bankers expect the government to take over First Republic Bank if “private sector solutions” fail to attract buyers or investors.
As traditional banks continue to confront financial difficulties, investors are looking to Bitcoin as a hedge against the financial system’s unpredictability. This scenario exemplifies Bitcoin’s rising popularity as a reliable investment and a store of value.
The BTC vs. banks narrative could be just what the market requires. Holding present levels and challenging previous levels could be incredibly positive for Bitcoin, perhaps leading to additional price increases.