Investing.com – There was a very strong gain over the weekend, mostly during the day on Sunday, so far peaking at $22,640 from a low of $19,592 on Friday.
At the time of writing, it is trading at $22,440, up almost 10% since 24 hours.
Fed bails out banks, bitcoin is lightened
As for the reasons for such a dramatic recovery in bitcoin and cryptocurrencies in general, it should be noted that the Federal Reserve surprised by announcing a new emergency loan program for banks after the collapse in recent days of the Silicon Valley Bank, which was once the 16th bank. the largest bank in the US and Silvergate Bank, a cryptocurrency-friendly bank.
The Fed’s new emergency lending program will help ensure banks can meet the needs of all their depositors, the statement said. Under the program, banks and other lenders will be able to pledge Treasury bills and mortgage-backed securities to provide liquidity, the Fed said.
Meanwhile, US financial officials said Sunday that Silicon Valley bank depositors will have access to “all their money” from Monday, according to a joint announcement by the Treasury Department, the Federal Reserve and the FDIC on Sunday afternoon.
More than $3.3 billion, or 8% of the $40 billion in reserves of the world’s second-largest stablecoin, is held by Silicon Valley Bank, cryptocurrency creator Circle said Saturday. USDC, which is believed to be trading at one against the US dollar, recovered almost to the dollar on Sunday after falling to 86 cents on Saturday.
Staking expectations also remain a key topic for bitcoin.
It should also be recalled that bitcoin had already begun to recover on Friday afternoon after the controversial NFP report lowered market expectations for the Fed.
Indeed, although the number of jobs exceeded the consensus, wage growth was below expectations, which is good news in the context of fighting inflation.
Following those numbers, the likelihood of seeing a 0.5% Fed rate hike at the March 22 meeting rose to nearly 80% earlier in the week following Powell’s scathing testimony before the US Congress.
Important Technical Thresholds for Bitcoin
From a graphical point of view, it should be recalled that it was the 200-day moving average, currently at $19,715, that stopped Bitcoin’s correction last Friday, as shown in the chart below:
Bitcoin then quickly rose above the key $20,000 threshold, the $20,400 100-day moving average, and the $21,000 and $22,000 psychological thresholds.
Now, BTC.USD appears to be hovering around a significant hurdle formed by the $22,650 resistance, the 50-day MA at $22,915, and the $23,000 psychological threshold. One could then target $24,000 and then yearly highs just above $25,000.
If bitcoin starts to fall again from this area, the first important support to consider would be the $21,400 area. Then the next potential targets are $20,500, $20,000 and the 200-day moving average at $19,715.