Crytos rise following renewed fears in the banking sector
There´s been a turnaround in the cryptocurrency market. Bitcoin (BTC) and Ethereum (ETH) rise after several sessions where they had fallen and they have now soared in the last 24 hours by more than 3% and 2%, respectively. The reigning cryptocurrency rebounds above $28,300 at the moment, while the leading altcoin regains $1,860.
Craig Erlam, senior market analyst at Oanda, highlights that Bitcoin has returned to an "interesting zone" after briefly breaching $30,000 in recent weeks. "It fell towards $27,000 earlier in the week, around $500 above the lows in the second half of March during the ascent. A break of $26,500 now could signal a much sharper decline, although some consolidation between here at $29,000 may be more likely for now," he noted.
For his part, César Nuez, technical analyst at Bolsamanía, stresses that the world's largest cryptocurrency "has not been able to hold at the $29,000 support," while warning of the danger of losing $26,520. "If it loses these prices, it would complicate its good short-term technical aspect and we could end up seeing an extension of the falls to the vicinity of $24,000 and without ruling out a plunge to $20,000, prices where the 200-session average converges," he indicated.
"We will not see a sign of strength again as long as it keeps trading below $31,200, the annual highs set in April," Nuez added.
Many analysts point out that this rally in digital assets is due to the resurgence of fears about the banking sector after the poor quarterly figures published by First Republic Bank. According to experts, the pattern seen during the banking crisis sparked by the collapse of Silicon Valley Bank, which boosted the price of cryptocurrencies as they were seen as a safe haven, is repeating itself.
"With First Republic Bank looking like it could go under, I suspect the market is anticipating yet more liquidity injections to prop up what certainly seems to be an American banking sector that is still very much in the throes of crisis," stated Jake Boyle, director of Caleb & Brown.
According to this analyst, Bitcoin is "front-running these expectations." "Bitcoin’s rally of late has more to do with liquidity injections and rising expectations that the Fed’s tightening will probably have to end fairly soon, or else even greater turbulence in the banking sector could ensue," he added.
On the other hand, the figures of the big tech companies continue to be of special interest for cryptos given their high correlation with Nasdaq. The choosy technological company closed lower on Tuesday after the results of Alphabet, Google's parent company, and Microsoft. Today, on Wednesday, it is Meta's turn to present its figures, while Amazon will reveal its results to the markets on Thursday.
In the rest of the altcoins, gains prevail. Cardano (ADA) rises over 4%, while Solana (SOL) soars 5% and other tokens such as Dogecoin (DOGE), Polygon (MATIC), Ripple (XRP) or Polkadot (DOT) rise between 2% and 3%.