Good morning Here’s what happens:
Prices: A late surge brought Bitcoin back to its previous spot above $28,000. Ether also recovered.
Insights: Is Crypto on the Mend? What will happen on the regulatory front? CoinDesk’s annual consensus conference features crypto industry leaders and will cover key topics for three days.
Bitcoin Rises, But Will the Rally Continue?
After staying below $28,000 for five days, Bitcoin made a surprise move higher, taking much of the rest of the market with it.
The largest cryptocurrency by market cap recently traded above $28,300, up about 3.7% over the past 24 hours. The origins of the surge have been difficult to pinpoint. BTC began ticking higher less than 24 hours after the embattled First Republic bank noted it had lost $100 billion in deposits during its first-quarter earnings presentation on Monday, raising concerns about the stability of the banking sector revived. Over the past month, cryptos have surged amid a series of regional bank implosions across the US as investors sought refuge in assets holding their value.
“With First Republic Bank looking poised to go under, I suspect the market is anticipating further injections of liquidity to prop up an American banking sector that is still in dire straits,” Jake Boyle, director of Caleb & Brown, a retail crypto broker, wrote in an email to CoinDesk. “Bitcoin is therefore ahead of these expectations. Cracks in the financial system are increasing, albeit relatively subtle at the moment, and it will be incredibly difficult for the Fed to adhere to its tightening regime going forward.”
Boyle added, “Bitcoin’s recent rally has more to do with liquidity injections and rising expectations that the Fed’s tightening will likely have to end fairly soon or even greater turmoil in the banking sector could ensue.”
Data from analytics firm Coinglass also showed that around $11.3 million in BTC short positions have been liquidated since 4:00 p.m. Short squeezes have historically tended to accelerate price jumps.
Ether recently changed hands around $1,870, up 1.8% from the same time Monday. Other major cryptos have been largely in the green, with SOL, the native token of the Solana blockchain, and ADA, the native crypto of Cardano’s smart contracts platform, both of which are up more than 3% recently. The CoinDesk Market Index, a measure of the overall performance of the crypto market, rose 2.6%.
In early Asian trading, the Nikkei and Hang Seng indices were slightly down. US stocks ended with the tech-heavy Nasdaq Composite down nearly 2%.
In his weekday column, CoinDesk analyst Glenn Williams emphasized that at least two technical indicators are heralding a Bitcoin rally. Williams noted that BTC’s “recent drop coincided with an expected drop in momentum, but also occurred in conjunction with a move towards the lower end of the Bollinger Band. Bollinger Bands represent the 20-day moving average of an asset and calculate two standard deviations above and an asset’s price is expected to stay within two standard deviations of the average 98% of the time, so a break above or below it is notable.
Williams wrote that “Bitcoin’s approach to the bottom of its Bollinger Bands is raising questions about its near-term path, but he added that “given recent history, technical analysts might expect BTC prices to, albeit methodically, back to their 20-day moving average”. .”
What to Expect at Consensus
Crypto is down but not out. The industry, which took a hit last year, will make its first major public presentation of 2023 at Consensus, CoinDesk’s annual conference. Many of the biggest names in crypto, government, Web3 and more will be in Austin, Texas this week to discuss the current state of the industry, the devastating year it’s just had and what’s ahead.
In that regard, things are looking good. If the first four months of the year are any indication of where the industry is headed, the rebuilding has begun.
Still, there is much more to build, policy to educate, and, yes, to invest in. While recent markets have given cause for optimism, fraud and contagion have completely shaken consumer confidence in the industry. Regaining that trust will be difficult, but this is the opportunity lying at the feet of today’s builders, regulators and decision makers – many of whom will share their views at Consensus.
Here’s what to expect in Austin this week.
Read the whole story here:
Crypto exchange Coinbase has asked a federal court to force the SEC to respond to a petition it filed last year asking for formal rulemaking on digital assets. This comes as Republicans on the House Financial Services Committee take another swipe at stablecoin legislation with a discussion draft released Monday afternoon. Rep. Patrick McHenry (RN.C.) joined “First Mover” to discuss.
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