While Bitcoin (BTC) The price action since the start of the year has been impressive, with it up more than 80% since January due to several factors.
However, according to recent reports, it is possible that it is active ready for another rally. In the past 24 hours, it was reported that another major US bank was experiencing a financial run suggesting insolvency or bankruptcy.
Another major bank collapse could affect the Bitcoin rally
According to the latest update, First Republic Bank (FRC) is currently going through a financial run as a bank revealed it lost nearly $100 billion in deposits during last month’s banking crisis. The bank said it is currently unloading between $50 billion and $100 billion in debt instruments as part of its “strategic options” to resolve the massive capital outflow.
However, the White House has expressed concern about a way to bail the bank out of insolvency, as reported by the Financial Times, which revealed that officials from the Biden administration, the Federal Reserve and the Treasury Department are calling the bank’s top executives. have consulted in the last few days.
Despite this, investors and traditional bankers seem to have panicked, looking for a safer haven or alternative to the store of value. Following the news, shares of the First Republic plummeted more than 40% and hit an all-time low during Tuesday’s trading session.
FRC shares, in particular, hit an all-time low of $8.10 as markets closed on Tuesday. Interestingly, while that was happening, Bitcoin prices started to experience bullish movement. This bullish move can be attributed to the panic of traditional bankers who see BTC as a bold alternative as major banks continue to collapse.
BTC could be warming up for another rally
The last time a similar banking crisis occurred in the US in March this year, Bitcoin reacted positively to the news and hit $30,000 for the first time in nine months. And according to Bitcoin’s latest price action, the asset seems to confirm the expected price action based on previous price action exposure to the banking crisis news.
In the past 24 hours, Bitcoin has recorded increases in value, rising 7.5% with a market price of $29,817. Over the same period, more than $30 billion has been added to the market cap. Trading volume has also surged, indicating buying pressure.
According to on-chain data provider Santiment, Bitcoin’s social dominance has increased compared to other altcoins in the market. Sanitation noted this “happens during market euphoria or (in this case) fear.” The data provider further noted, “Prices may recover quickly.”
Santiment is not alone in anticipating Bitcoin’s recovery from its previous bearish price action. Popular crypto analyst Michael Van de Poppe stated:
Bitcoin isn’t looking bad on the higher timeframes. Healthy correction, and as long as Bitcoin remains above $25,300, it is likely that we will continue this rally towards $42,000.
According to the analyst, as long as Bitcoin remains above $25,300, which it currently is as an asset trades above $29,000Bitcoin will enjoy another rally to trade above $40,000.
Featured image from iStock, chart from TradingView
