Bitcoin price has been increasing throughout 2023 as a result of previous bank runs, but has recently rejected above the critical $30,000 mark. However, the leading cryptocurrency has now risen from over $1,000 intraday to over $28,000 per coin following the crash in First Republic Bank stock. Retesting previous levels alongside a new narrative may be very bullish for BTC. Here’s a closer look at how the continuing banking crisis can support increasingly profitable pricing action.
Traditional banks have been battling liquidity problems and bankruptcies in recent months, and Bitcoin has benefited a lot from this trend. Silicon Valley Bank and others saw banks go big in early March. As a result, BTCUSD has increased by more than 40% in a few days. As First Republic Bank stock plummeted and deposits of over $100 million left the bank, Bitcoin was once again on the rise.
While the $1,000 gain itself is extraordinary, a retest of Bitcoin and maintaining a critical support level could inspire crypto bulls to push the price higher. Setbacks will also become less noticeable. A shallow correction indicates buying and demand pressure.
Bitcoin hitting new highs in 2023 can also indicate that the crypto winter is over and things are going to heat up in the next few weeks.
The decline in First Republic Bank’s share price was due to the disappointing first quarter earnings report. The bank stated that more than $100 million in deposits were written off in the first quarter. CEO Mike Roffler announced that the bank will “pursue strategic options” and “take steps to reduce our expenses substantially to align with our focus on reducing balance sheet size.” Banks will lay off up to 25% of their workforce, reduce executive-level salaries and do other things.
According to Charles Gasparino of Fox Business News, bankers expect the government to take over First Republic Bank if “private sector solutions” fail to attract buyers or investors.
As traditional banks continue to face financial difficulties, investors are looking to Bitcoin as a hedge against the uncertainties of the financial system. This scenario exemplifies the growing popularity of Bitcoin as a reliable investment and store of value.
The BTC vs bank narrative could be just what the market needs. Defending the current level and challenging the previous level can be very positive for Bitcoin, possibly leading to additional price gains.