Bitcoin price has been in an uptrend throughout 2023 in the wake of historic bank runs, but recently was rejected from above the key $30,000 level.
However, the top cryptocurrency has now risen more than $1,000 intraday to over $28,000 per coin after First Republic Bank shares collapsed. Holding a retest of previous levels combined with a new narrative could be extremely bullish for BTC. Here a closer look at how continued crisis in the banking sector could strengthen the increasingly positive price action.
Bitcoin Retakes $28,000 But Is More Upside Coming?
In the past few months, traditional banks have been struggling with issues of liquidity and insolvency, and Bitcoin has been a big beneficiary of this trend. In early March, Silicon Valley Bank and others saw widespread bank runs.
As a result, BTCUSD climbed more than 40% in just a few days. Now, as First Republic Bank’s shares plummet, and more than $100 million in deposits flee the bank, Bitcoin is soaring once again.
Although a $1,000 move is notable itself, importantly, Bitcoin retesting and holding a crucial support line could instill confidence in crypto bulls to push prices higher. Pullbacks would also be getting much less pronounced. Shallow corrections are a sign of buying pressure and demand
Bitcoin making fresh 2023 highs could also further signal crypto winter has ended and things will heat up un the coming weeks.
First Republic Bank Risks Failure, Reigniting New Crypto Narrative
First Republic Bank’s decline in share price is due to a negative first-quarter earnings report. The bank revealed that more than $100 million in deposits had been withdrawn in Q1.
CEO Mike Roffler announced that the bank would be “pursuing strategic options” and “taking steps to meaningfully reduce our expenses to align with our focus on reducing the size of the balance sheet.” The bank will be laying off up to a 25% of the workforce, cutting executive-level salaries, and much more.
Fox Business News’ Charles Gasparino claims bankers expect government receivership for First Republic Bank as “private sector solutions” fail to attract interest from buyers or investors.
As traditional banks continue to face financial crises, investors are turning to Bitcoin as a hedge against the instability of the financial system. This phenomenon highlights the growing acceptance of Bitcoin as a store of value and a reliable investment.
The BTC beats banks narrative could be just what the market needed. Holding the current levels and testing previous levels could be extremely bullish for Bitcoin, possibly leading to further price appreciation in the future.