Bitcoin hits $30,000 for first time since June 2022

Bitcoin, the largest cryptocurrency by market value, climbed above the key $30,000 level for the first time since June 2022, rallying more than 80 per cent since the start of the year, as investors raised bets that the US Federal Reserve will soon end its aggressive monetary tightening campaign.

The token rose as much as 2 per cent to $30,262. Bitcoin has gained about 6 per cent since the start of the month, after rising 23 per cent in March. Still, Bitcoin is down more than 50 per cent from its all-time high in November 2021.

“The rise of Bitcoin is a clear indication that the current banking crisis has sharpened the focus on the importance of decentralized finance. The latest Bitcoin rally is expected to uplift the sentiments of the crypto community across the globe and the Ethereum Shanghai upgrade which is scheduled to go live tomorrow, is adding to the euphoria around digital assets,” said Om Malviya, President at Tezos India.

“Bitcoin-related stocks are also witnessing an upward trend owing to the BTC rally and the momentum is expected to continue if the macroeconomic factors remain favourable. As we approach Bitcoin halving which is due in May 2024, we can expect the BTC price to rise further,” Malviya added.

Bitcoin’s surge follows Friday’s closely-watched US nonfarm payrolls report that showed employers maintained a strong pace of hiring in March, pointing to a still-resilient economy.

Banking sector turmoil

However, banking sector turmoil sparked by last month’s collapse of Silicon Valley Bank has raised market expectations that the US Fed is unlikely to lift interest rates much higher for longer as it looks to ease stress on the sector.

“The reason behind the broad-based rally in crypto is traders’ optimism toward central banks’ monetary policy,” said CMC Markets analyst Tina Teng.

“Bets for a sooner Fed pivot on rate hikes have been dramatically strengthened following the bank turmoil in early March,” Teng said.

The token’s breakout above stiff resistance at $30,000 comes after a so-called squeeze of the Bollinger Band, which saw historical volatility fall to the lowest since January.

The compression back then resulted in a sharp move upward that looks similar to today’s upside breakout. Traders following technical patterns may now be looking at the $30,800 area as a first potential objective, followed by $31,200.

To be sure, the cryptocurrency industry is still facing immense scrutiny. Crypto platform Coinbase Global said that it has received a notice from the Securities and Exchange Commission declaring its intention to bring an enforcement action.

The SEC has sued crypto mogul Justin Sun for allegedly violating securities rules in a case Sun said lacks merit. And elsewhere, the US Commodity Futures Trading Commission has sued Binance founder Changpeng Zhao and his crypto exchange for alleged violations of derivatives regulations, though Binance has said it doesn’t agree with many of the agency’s characterizations.

Ethereum, the second largest cryptocurrency, stood near last week’s roughly eight-month peak of $1,942.50. It was last 0.25 per cent higher at $1,925.12.

Cryptocurrency investors are eagerly anticipating a major revamp to the Ethereum blockchain this week that is set to allow them to gain access to more than $33 billion of ether currency.

Dubbed Shapella, the software upgrade will let market players redeem their “staked ether” – coins they have deposited and locked up on the network over the past three years in return for interest.

With agency inputs

Know your inner investor
Do you have the nerves of steel or do you get insomniac over your investments? Let’s define your investment approach.

Take the test

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint.
Download The Mint News App to get Daily Market Updates.


Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button