Bitcoin and Ethereum shake off Fed fears, extending gains
Bitcoin prices jumped on Monday after the collapse of SVB triggered fear throughout the banking system. While US regulators rushed to ease fears on Sunday evening, the injection of additional liquidity and the safeguarding of client deposits drove cryptocurrency higher.
Although the sudden closure of Signature and New York Bank posed an additional threat to digital assets, the assurance by the US treasury, Fed and FDIC (Federal Deposit Insurance Corporation) helped boost demand for risk assets.
Additionally, the recent incident has reduced expectations of another aggressive rate hike at the upcoming FOMC. Because both Bitcoin and Ethereum are sensitive to rising interest rates, a shift in the narrative pushed yields 2-year yields to a six-month low, weighing on Dollar strength.
Image taken from Nick Cawley’s article: Gold Price – XAU/USD Eyes Support as CPI Nears and US Bond Yields Rebound
US 2-YEAR YIELD
Bitcoin Price Analysis
With BTC/USD progressing toward the next zone of psychological resistance at $25k, ETH/USD reached $1,700 which remains as major resistance for the imminent move. After the formation of a hammer candle on the daily chart, the aggressive move higher has seen Bitcoin rise over 20% since Friday’s close.
As the current daily high holds around the $24,917 handle, a potential rising-three methods formation (a five candlestick pattern) on the weekly chart suggests that bullish continuation may be possible if prices can clear $25,000.
Bitcoin (BTC/USD) Daily Chart