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Why is Bitcoin price up today

  • admin
  • March 13, 2023
  • 4 minute read
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Bitcoin price is up today as the initial shock of the SVB crisis gives way to a BTC price recovery above $20,000 — how could BTC/USD behave now?

Bitcoin 

BTC

$22,471

 price is up on March 11 as cryptocurrency markets stabilize following panic over a potential banking crisis.

Data from Cointelegraph Markets Pro and TradingView shows BTC/USD climbing past $20,300 at the time of writing, the pair up 2% from the day’s lows.

After threatening to lose $20,000 as support, bulls are attempting to preserve some significant trend lines as weekend trading offers a chance for increased volatility.

Uncertainty remains in the air, however, as the aftermath of the meltdown at SVB Financial is far from over — crypto stablecoins in particular are feeling the heat.

How is Bitcoin recovering and ho does the short-term BTC price outlook shape up for traders? Cointelegraph takes a look at why Bitcoin is gaining.

Crypto markets digest SVB crisis

After sending an eerily similar signal to Silvergate bank, Silicon Valley Bank (SVB) and its parent company SVB Financial managed to spark significant panic across crypto markets.

As liquidity concerns piled up, Bitcoin led crypto in sliding to multi-month lows. Contagion from SVB, the United States’ 16th largest commerical lender, to other banks at home and abroad added to the pressure.

A day later, however, and the dust appears to be already settling.

The initial shock of another bank failure sparked a cascade of selling among traders, but the latest data shows that the picture is stabilizing and a relief rally is underway.

“Volume is coming in, think this could play out by end of March, if not sooner,” popular commentator IncomeSharks commented in part of analysis covering the rebound.

Likening current price action to 2016, meanwhile, trader Alan, also known as Trader Tardigrade on Twitter, described Bitcoin’s performance as “retracement before take-off.”

Nonetheless, certain market participants believe that a new local low will materialize over the course of the weekend, among them Crypto Tony, who bet on BTC/USD going below $19,200.

“A lot of drama happening in the white box on the BTC Daily chart,” Keith Alan, co-founder of monitoring resource Material Indicators, continued about his own findings.

“Price dumped through the local R/S Flip range, bounced off the 200-Day MA to reclaim the 100-Day MA, the 2017 Top and the Trend Line, but the 20-Day MA crossing the 50-Day suggests the pump may be short lived.”

USDC drama cools

Part of the SVB debacle currently being dealt with by markets concerns stablecoins, notably Circle’s USD Coin 

USDC

$0.99, the second-largest stablecoin by market cap.

After Circle revealed that part of its cash reserves for backing USDC had been swallowed by SVB, USDC began to depeg from the dollar, still trading at $0.915 at the time of writing.

While that event initially sparked fresh selling pressure on Bitcoin and altcoins, this was likewise temporary.

Even as other stablecoins began to lose their dollar peg, contagion failed to spark a fresh significant selling spree. 

Reacting, one theory suggested that had the timing been different, the USDC peg could have already returned.

“If this wasn’t a Saturday, arbitrageurs would buy USDC of the spot market and redeem it for 1:1 via circle and bring back the peg,” an ex-Bitcoin miner and derivatives trader known as Cyborg Psyops Layers on Twitter argued.

“The problem is that banks are closed now and there too many apes selling there USDC on spot markets. I would classify this situation as over reaction. I’m buying a 85c USDC. I understand the risk.”

He added that USDC should not have traded at less than $0.92 based on what had happened.

Markets commentator Tedtalksmacro meanwhile saw signs that USDC would survive and not follow SVB into a downward spiral of capitulation despite the peg issue.

“Can never be sure in crypto but, it looks to be ok. 8.25% of Circle’s reserves are stuck… leaving 91.75% of their funds liquid,” he tweeted overnight.

“Even in the case that funds are totally lost, Coinbase will step in to sure up USDC Market reaction seems to be just total panic led by recency bias.”

“Bears being trapped” by funding rates?

Some front-runners may already be capitalizing on market nerves.

Related: Bitcoin price spikes to ‘$26K’ in USDC terms — How high can the BTC short squeeze go?

A look at funding rates across exchanges suggests that while the majority continues to bet on fresh BTC price downside, the potential for a “short squeeze” is clear.

Average funding rates were at their lowest since the FTX aftermath in November 2022 as of March 11, something not lost on popular trader G a a h.

“Funding Rates hit about -0.09.  It is the lowest in 121 days since November 2022,” he tweeted alongside a chart from on-chain analytics platform CryptoQuant.

“The market is in a bearish sentiment, most investors betting on further declines. Bears being trapped?”

For a detailed explanation of funding rates and how they can influence BTC price action, read Cointelegraph’s dedicated crypto metrics guide here.

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