Bitcoin rallies on banking crisis as shorts forced to close

  • BTCUSD
    (${instrument.percentChange}%)

Bitcoin responds positively to banking crisis

Bitcoin jumped almost 9% yesterday and 7% on Sunday. This is in response to the confidence crisis across the US banking sector following the SVB failure. The cruptocurrency is also sensitive to front end of the yield curve repricing yields downwards.

Risk assets, including cryptocurrencies, were under pressure last week as the market worried that the Fed would hike by 50bps. That has now dissipated with the banking sector crisis. As such, risk assets are now being potentially supported.

Moreover, as prices plunged last week, short positions were initiated. These are being closed as the market discounts potential Fed policy. According to data firm Coinglass, close to $200m in shorts were closed or liquidated over the last two days (www.barrons.com).

Technical Analysis


BTCUSD's daily chart is trading in its bullish channel, between the upper blue and red bands. The longer its stays in this area, the greater the likelihood of further price appreciation. However, if its slips back down into the neutral area, between the blue bands, momentum will be waning.

The hourly chart is already showing signs of slowing momentum. Its stochastic has crossed down and has slipped under eighty. A retaking of the upper quintile will suggests that an underlying bullish momentum is present. However, if the stochastic moves towards twenty, the bullishness will be dispersing.

Russell Shor

Senior Market Specialist

Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.

${getInstrumentData.name} / ${getInstrumentData.ticker} /

Exchange: ${getInstrumentData.exchange}

${getInstrumentData.bid} ${getInstrumentData.divCcy} ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%) ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%)

${getInstrumentData.oneYearLow} 52/wk Range ${getInstrumentData.oneYearHigh}
Disclosure

Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed here.

Past Performance: Past Performance is not an indicator of future results.

Spreads Widget: When static spreads are displayed, the figures reflect a time-stamped snapshot as of when the market closes. Spreads are variable and are subject to delay. Single Share prices are subject to a 15 minute delay. The spread figures are for informational purposes only. FXCM is not liable for errors, omissions or delays, or for actions relying on this information.