Daily News | BTC Rises 10% with Regulatory Backing Amid Unstable US Equity Markets and Investor Caution Before CPI Data

Crypto Daily Digest: Bank Stock Selloff, Crypto Rally, and Fed Policy Reassessment

Good morning, traders! Let’s seize this Tuesday relentlessly and make the most of it! 🚀

Silicon Valley Bank’s collapse led to a decline in Asian equities, while bond prices rallied in early Tuesday trading. New Zealand’s two-year government bond yields fell by 20 basis points, and Australia’s three-year maturity rate also decreased. Financial stocks were among the decliners in these markets. The US experienced its biggest one-day slump in decades in the yield on the two-year Treasury note, while tech stocks recovered from the previous week’s decline. This has led to a quick reassessment of Fed policy, with swaps traders pricing in less than a 60% chance that the Fed will increase rates by another quarter percentage-point later this month.

Meanwhile, in the US, investors scrambled to minimize their exposure to bank stocks, leading to trading halts as many lenders suffered significant declines. Despite new safety nets announced by the Treasury Department, Federal Reserve, and Federal Deposit Insurance Corp. that would protect the nation’s deposits, the selloff continued. President Joe Biden pledged to hold banks accountable for their downfall, and Michael Burry compared the collapse of SVB to the 2008 financial crisis. SoftBank, led by Masayoshi Son, was also affected.

In contrast, Bitcoin and shares of crypto companies surged following moves by US authorities to address concerns about the health of the financial . This was the largest one-day increase since November 2021 and helped recover losses from the worst week in about four months due to an equity selloff, regulatory crackdown, and jitters in the banking sector. Additionally, Binance announced the conversion of remaining stablecoin funds to Bitcoin, Ether, and its BNB token, further contributing to the optimistic sentiment.

Topic of the Day: Bitcoin Value Surges 10% in 24 Hours with Regulatory Support, but Investors Maintain Caution

In the last 24 hours, Bitcoin‘s value has increased by more than 10% and reached a high of $24,480. This surge is attributed to regulators’ support for deposits at Silicon Valley Bank and Signature Bank. Analysts predict that the Federal Reserve may adopt a more lenient stance following the recent near collapse of the banking industry. Although the bailout has eased concerns about contagion risk, there is still a sense of caution among investors. Ether and other cryptocurrencies also experienced gains, while the equity markets had mixed results. The S&P 500 and Dow Jones Industrial Average declined by 0.1% and 0.2%, respectively, while the tech-heavy Nasdaq Composite increased by 0.4%.

Regulators’ support for deposits at Silicon Valley Bank and Signature Bank is a promising indication for the cryptocurrency industry, as it suggests that institutional investors are acknowledging the potential of digital currencies and are open to investing in them. Alternatively, it suggests that the crypto sector plays a significant enough role that regulators cannot afford to overlook it in the event of a potential market-wide collapse.

Analysts’ predictions of a more lenient stance from the Federal Reserve following the banking industry’s near collapse is also a potentially positive development. This could result in increased liquidity in the financial , which would be beneficial for businesses and consumers. However, a more lenient stance could also lead to inflationary pressures and duation of the US dollar, which would have negative consequences for the economy in the long run.

Despite the bailout easing concerns about contagion risk, there is still a sense of caution among investors. This caution could lead to a reduction in demand for risky assets such as stocks and cryptocurrencies. However, the gains in Ether and other cryptocurrencies indicate that there is still a strong interest in digital currencies. This interest could result in increased investment in the industry, leading to further growth and innovation.

The mixed results in the equity markets also have potentially positive and negative implications. The decline in the S&P 500 and Dow Jones Industrial Average could indicate that investors are worried about the economic outlook. However, the increase in the tech-heavy Nasdaq Composite suggests that investors have confidence in the technology sector’s ability to weather economic uncertainty. Overall, the mixed results indicate that the market is still volatile, and investors need to be cautious in their investment decisions.

Bitcoin (BTC) $72.76 (+0.17%) - Neutral Outlook

Overview:

• Closest hourly support zone: 23985 - 23471
• Closest hourly resistance zone: 24269 - 25070
• Key Level: 24269 (Weekly High of Dec. 14 - 21, 2020)

BTC’s RSI on the daily timeframe has invalidated bearish momentum by breaking above a descending triangle. On the 4H timeframe, BTC has broken the 200EMA during yesterday’s rally, indicating strong buying power. However, the upward trend’s steep slope suggests that it may not be sustainable without a pullback. Moving forward, if BTC falls below the ascending lower channel, it may experience a pullback to a range between the lower edge of the demand zone [23225] and the 4H golden zone [22893]. Alternatively, if BTC breaks and closes above 24396 [the highest 4H closing price of the last surge], it may retest 25070 and aim for the weekly level of 26283.

Hourly Resistance zones

1. 24269 - 25070
2. 26283 - 26643
3. 27393 - 28540

Hourly Support zones

1. 23985 - 23471
2. 23225 - 22893
3. 22680 - 22123