Bitcoin was struggling to break the $24,000 – $25,000 price range since the beginning of Feb 2023. But it finally broke this range during the second week of March with strong momentum. And it made a high of $28,868 for the first time in 2023. Bitcoin is now moving in a range of $26,601-$28,868 for almost a week.
Some investors think that the recent upside move was a result of a FOMO that occurred following the bankruptcy of Silicone Valley Bank and other American banks. It means they’re now considering a price reversal from these levels. But some investors think that Bitcoin’s price will reach $30,000 before dropping.
The following Bitcoin weekly news may give an idea of how Bitcoin may perform over the coming days.
Bitcoin Liquidity Hits 10-Month Low
Liquidity is an important factor that defines how smoothly investors can convert their assets to fiat. Although Bitcoin’s price is increasing, its liquidity has shrunk significantly and has reached a 10-month low amid the US Bank crisis. Sophisticated investors avoid placing trades when there’s poor liquidity in the market.
Similarly, the traders may lose money due to larger spreads, thin slippage, and order books. This drop in liquidity can show extreme volatility in Bitcoin’s price over the coming days. Sometimes, traders take the price toward the upside when the liquidity dries up but the historic data shows that the price eventually moves to the downside in such market conditions.
Bitcoin Weekly Updates by Bloomberg Analyst Mike McGlone
Mike McGlone has recently shared his analysis saying that the collapse of major US banks like Credit Suisse and Silicone Valley Bank can act as a spark for the next crypto bull run. He says that investors’ confidence is badly shaken due to this collapse. In this situation, Bitcoin is considered a hedge against the bank risk.
He thinks that the U.S. economy is swiftly moving toward recession due to FED’s unwillingness to ease monetary policy. He thinks that the current economic crisis will support the growth of the crypto market. And Bitcoin will outperform all other cryptocurrencies during this crisis.
He said that S&P 500 will most probably stay below the 4,000 level as long as Bitcoin’s above $25,000.
Crypto Banking Problems in UK
The U.S. crypto clients are looking for new banking partners following the collapse of major banks in the United States. The UK banks are considered to be a better alternative but most UK banks are limiting their interactions with this sector. So, it’s creating problems for most crypto companies they’re concerned that other banks and Payment Services Providers may also ban their services following this drive by the UK banks.
Recently, many users have reported on Twitter that they’re unable to transfer funds to crypto exchanges through U.K. banks. Alison Rose, The chief executive officer of NatWest, told the parliamentary members that the U.K. banks are pulling away from crypto. That’s why crypto-related businesses can’t open accounts with banks.
NatWest has also set limitations for the customers to transfer funds to the crypto exchanges. The main goal of taking this step is to protect customers from crypto scams.
Bitcoin’s Dominance is Rising
Bitcoin Dominance is a unit used to determine whether investors are investing money in Bitcoin or not. Bitcoin’s Dominance started dropping in December 2020 and made a low of 39.66%. Since then it’s moving in a tight range and struggling to break the 48.03% to 48.99% range.
Since May 2021, Bitcoin Dominance has tested this range twice and it’s consolidating in a range for a long time. In fact, it has formed a parallel channel during this two years time. Some technical chart analysts say that it’s a bearish flag that usually breaks down. It means they’re expecting the price to retest the 48.03% to 48.99% and then drop below.
But it’s worth noting that the bear flag is validated once it breaks down properly. On the contrary, if the price broke out of the above-mentioned range, it will be a positive sign for buyers. And the price of Bitcoin will most probably increase after it broke the resistance.
However, it may be a negative indicator for altcoins because the rising Bitcoin Dominance means that investors are pulling out their money from other cryptocurrencies to buy Bitcoin. Since May 2021, it’s the first time that Bitcoin Dominance has increased with such strong momentum. So, most traders are confident that Bitcoin Dominance will break out of this resistance this time.
Mike McGlone’s prediction is hope for most crypto investors but the prediction is directly associated with the U.S banks crisis. Bitcoin’s reduced liquidity might be a concern for some investors but the price may increase a little further before dropping. Bitcoin’s Dominance is also close to strong resistance.
So, the coming week can be really important in setting up Bitcoin’s direction for the next few weeks. Feel free to subscribe to our Weekly Bitcoin newsletter if you need regular updates about the crypto market.