Bitcoin's value has been on an upward trajectory in 2023 following historical bank runs. However, it was recently unable to surpass the crucial $30,000 threshold, resulting in a rejection. Yet, after the collapse of First Republic Bank shares, the primary cryptocurrency has surged over $1,000 in a single day, reaching above $28,000 per coin. Should there be a retest of former levels combined with a new narrative, this could lead to a highly optimistic outlook for BTC. Let us delve deeper into how a continuous crisis in the banking industry may fortify the ever-increasing bullish trend of the cryptocurrency's price.
Bitcoin Retakes $28,000 But Is More Upside Coming?
In recent months, the conventional banking system has been encountering liquidity and solvency concerns, with Bitcoin being a notable beneficiary of this trend. In early March, Silicon Valley Bank and others underwent massive bank withdrawals.
As a result, BTCUSD soared more than 40% in a matter of days. Presently, with First Republic Bank's shares plummeting and over $100 million in deposits fleeing, Bitcoin is once again surging.
While the $1,000 price shift is significant on its own, the cryptocurrency's ability to retest and uphold a vital support level could bolster the confidence of crypto bulls to drive prices higher. Additionally, retracements would be much less significant. Minor pullbacks signify purchasing pressure and demand.
Further, Bitcoin hitting fresh 2023 highs could indicate that the crypto winter is over and that things will heat up in the upcoming weeks.
First Republic Bank Risks Failure, Reigniting New Crypto Narrative
The decline in First Republic Bank's share price is attributable to a pessimistic first-quarter earnings report. The bank announced that over $100 million in deposits were withdrawn in Q1.
CEO Mike Roffler stated that the bank would be exploring "strategic alternatives" and "taking measures to significantly reduce our expenditures to align with our emphasis on downsizing the balance sheet." The bank plans to reduce its workforce by up to 25%, cut salaries of top-level executives, and make other similar changes.
According to Charles Gasparino of Fox Business News, bankers anticipate that the government will take over First Republic Bank as "private sector solutions" fail to garner interest from potential buyers or investors.
As traditional banks continue to face financial difficulties, investors are increasingly using Bitcoin as a hedge against the instability of the financial system. This trend underscores the growing acceptance of Bitcoin as a dependable investment and store of value.
The notion that BTC outperforms banks could be the catalyst that drives the market forward. If Bitcoin can maintain its current levels and successfully retest prior levels, it could bode very well for the cryptocurrency, leading to further price appreciation in the future.
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Source: bitcoinist
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Disclaimer
The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.
