Bitcoin could actually be a viable safe haven against the potential turbulence of the traditional fiat-based fractional-reserve banking system. This discourse is increasingly shared by investors in cryptocurrency and traditional asset classes. This contributed, this week, to propel the BTC to new heights recorded over several months compared to its main altcoin competitors.
According to TradingView, bitcoin dominance, i.e. the percentage of the total capitalization of the cryptocurrency market occupied by bitcoin, reached its highest level in nine months on Wednesday, exceeding 45.5%. This comes after the exchange rate for the BTC/ETH pair hit its highest level since November to start the week at around 15.
For its part, BTC/BNB pair is close to its highest high since last August and is around 80. For its part, BTC/XRP is at its best level since last September, above 62,200, while the BTC/ADA pair is at its lowest level since the start of 2021. Blockchaincenter.net’s altcoin season index has therefore firmly tumbled. It is now in “bitcoin season” which is defined by scores below 25, with the current score at 22. It is down from late February highs in the 47 zone.
Can bitcoin reach $30,000?
The rise of bitcoin comes after the cryptocurrency this week hit its highest levels since last June, in the mid-$26,000s. This rally is staggering considering last week’s dip which brought new lows below $20,000 in the span of two months.
Last week’s fall was triggered by broader risk reduction flows after the bankruptcy of a series of American banks favorable to the cryptocurrency and technology.
Analysts say this week’s rally was triggered by a combination of several bullish factorsnotably :
- 1) A proactive response from US authorities to support customer deposits bankrupt banks.
- 2) Launch a new bank liquidity programwhich helped USDC, a capital stablecoin in the cryptocurrency market treasury, recover to its $1 level
- 3) Expectations that the risk of a banking crisis would deter the Fed from committing to further substantial hikes interest rates.
The aforementioned speech that bitcoin is a safe haven against the difficulties of the traditional financial system is also believed to have contributed to bitcoin’s success over its major cryptocurrency rivals.
Likewise, this discourse is presented as a factor in the promotion of bitcoin. However, whatever the cause of this rebound, analysts’ price forecasts have become much more optimistic.
Technical signals are good as bitcoin rebounded strongly after recently retesting the 200-day moving average and the realized price, both just below $20,000. This is a sign that the bull market is robust.
In addition, the recent breakthrough above the area of resistance between 25,200 and $25,400 is seen as an opening for an upside move towards the next resistance zone at the $28,000-$30,000 area.
On-chain indices that signal the end of a bear market continue to send good signals, as we saw in this recent article. Indicators relating to bitco activityin on-chain, such as daily transactions, new address creation, daily active users, number of addresses with non-zero balance, generally continue to move in the right direction.
Traders will continue to monitor the health of the US and global financial system, any signs of further cracking are likely to fuel bitcoin’s rebound. The Fed Meeting next week will be another key event to watch. This week’s US CPI and PPI indexes, fortunately for the Fed, give it some leeway to signal a slightly less aggressive tightening outlook. Bitcoin could thus benefit from a further boost.
If bitcoin can reach and exceed the $28,000 resistancethe door would then be open for a further rise above $30,000, until the next major resistance located in the $32,500-$33,000 area.