Bitcoin surges to 9-month high as central bank adds liquidity to ease banking crisis

BTC is now up more than 28% over the past week and is the best performing cryptocurrency among the top 10 by market cap.

Bitcoin (BTC) broke through a resistance level that had remained strong for nearly a year on March 20 – hitting a nine-month high of $28,400.

The recent price gains come after the Federal Reserve announced it had worked with major central banks around the world to support dollar cash flows "to ease stress in global funding markets."

Central Bank Union

The Fed said on March 19 that it would take coordinated action with other central banks that offer U.S. dollar operations — namely, the European Central Bank, the Bank of Canada, the Bank of England, the Bank of Japan and the Swiss National Bank — to ensure support for households and businesses. Credit availability is unaffected.

Starting March 20, the central bank will increase the frequency of seven-day dollar maturity operations from weekly to daily.

The swap lines will remain available until at least the end of April, according to the press release.

Markets expect regulators to also slow the pace of rate hikes amid the banking crisis, which has so far hit several U.S. banks and Credit Suisse.

The last time central banks introduced such levels of liquidity into funding markets was at the start of the Covid-19 lockdown, and analysts expect Bitcoin to continue to surge as excess money injected into the economy finds its way into the asset.

Renewed interest in Bitcoin

At press time, Bitcoin is up more than 28% over the past week and is trading at $28,290. Problems in the traditional banking system appear to have shaken people’s trust in traditional assets, and more funds are beginning to flow into Bitcoin.

Open interest in Bitcoin futures hit $12 billion over the weekend, according to data from CoinGlass, suggesting renewed interest in the flagship cryptocurrency.

The $12 billion hit a new yearly high and could be a harbinger of a new bull run driven by additional central bank liquidity being introduced into the market in the coming weeks.

Meanwhile, most altcoins have experienced similar surges, with most of the top ten cryptocurrencies by market cap rising between 5% and 15% over the past week.

BTC has gained the most among the major cryptocurrencies over the past seven days, showing its resilience to financial market turmoil and instability. Recent weeks have proven that Bitcoin is steadily becoming the “safe haven” asset it was created to be. #牛回，速归