3 Reasons Crypto Prices are Rising Today – New Bull Market Starting?

3 Reasons Crypto Prices are Rising Today – New Bull Market Starting?

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Pixabay / Xresch

Financial markets have been gripped by fear in recent days as fears a tumultuous sequence of banking crises could turn into sector contagion.

It all started with the shutdown of Silvergate Bank’s SEN payment network (key crypto industry infrastructure) following a run on deposits in November.

This was quickly followed by the implosion of Silicon Valley Bank, the 16th largest bank in the United States, and a bastion of startup capital and venture capital financing.

This was also fueled by a run on deposits, after dire details emerged about the performance of SVB’s bond portfolio in the face of high interest rates.

Representing the biggest banking collapse since 2008, concerns about the possible spread of a bank contagion took hold.

US bank shares took a hit on Friday, with some stocks falling as much as -35%.

And this damage continues to spread today, with several US banking stocks seeing trading halt.

The S&P500 was negative year-on-day this morning, while the Dow Jones and NASDAQ took a hit.

Meanwhile, Bitcoin (BTC) has surprised markets, with an encouraging bounce above $20,000 being described as a ‘cyprus moment‘ as investors rush to find safer havens for capital outside of fractional-reserve banking.

Here are three reasons that help explain why cryptocurrency prices are soaring despite this week’s banking chaos.

1. Circle ends SVB’s fears

The Federal Deposit Insurance Corporation (FDIC) today began selling SVB assets to pay up to 50% of deposits to SVB customers.

This is a substantial relief for the legions of USDC holders who have remained desperate as the USDC de-pegged in recent days.

The depeg came after a cheep de Circle disclosed its exposure to the Silicon Valley Bank crisis.

As investors flocked to pull their capital out of USDC, the value fell as low as $0.87, throwing the industry into temporary chaos.

However, over the weekend, the USDC moved to the repeg, having rallied back to around $0.99.

The repeg effort has seen significant support from coin basewhich moved to reset 1:1 USDC:USD trading this afternoon, though fiat USD will remain unconverted by default.

On Sunday, Circle CEO Jeremy Allaire revealed the $3.3bn (8% of Circle’s stakes) the company owns with SVB will be available today.

Overall, it looks like Circle has escaped the worst of Silicon Valley Bank for now, and this has been a big boost in reassuring volatile crypto markets.

2. On-chain sentiment: The worst of the sell-off is over

Despite serial efforts to break out to retest $25,000, Bitcoin (BTC) price action has been held back by strong selling pressure for nearly a month now, but the worst might be over by now.

In fact, looking at On-Chain, Bitcoin has faced 25 days of net inflow on the exchanges. In layman’s terms, this means that over 25 days more BTC has been moved onto exchanges than off of them (into cold storage). This is usually a sign of liquidation, as investors move their BTC from their ledgers to exchanges to sell.

However, as of yesterday, it looks like the sell-off may be over, as the overall change in the exchange’s net position has finally reversed to a net outflow, a clear sign of accumulation.

Bitcoin on BTC chain

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These outflows are more significant than they appear, as they are part of a larger picture of Bitcoin accumulation, with the exchange balance as a percentage of total supply (11%) now at its lowest level since December 2019. 2017.

Crypto Bitcoin BTC on chain

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Even better? The rapid drop below $20,000 following the Silicon Valley Bank implosion seems to have shaken up any remaining weak hands in the space.

A look at Bitcoin holding waves paints a picture of supply maturing, with recently active supply largely driving day-to-day price action.

Bitcoin Waves BTC HODL
Fountain: glass node

And of those strong hands? Accumulation is in full swing with the number of Bitcoin wallets holding >1 BTC skyrocketing towards 1 million ‘wholecoiner’ addresses.

Bitcoin BTC wallet addresses > 1 on-chain” class=” lazyload” src=”https://www.business2community.com/wp-content/uploads/2023/03/thumbnail_glassnode-studio_bitcoin-number-of-addresses-with-balance-1-2-760×428.png” srcset=””/></p>
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Overall, On-Chain sentiment represents the end of the sell-off period as markets move towards accumulation positioning, especially among longer-term holders.

The end of the sell wall could usher in a big uptrend for Bitcoin and cryptocurrencies in general.

3. The Bitcoin (BTC) network is more secure than ever

The last reason to be bullish on crypto markets this week comes from the adoption of the Bitcoin SHA-256 network, which is currently the largest to ever exist.

The SHA-256 hash rate, which measures the amount of computing power directed into the Bitcoin network, is the highest it has ever been.

Bitcoin BTC Hash Rate
Fountain: glass node

This is optimistic for a number of reasons: First, there has never been so much computing power directed at Bitcoin, which means that adoption of the network is the highest it has ever been. And this feeds into the second benefit of making the network more secure: a dreaded 51% attack against the BTC network is less likely than ever.

Tracking the hash rate is the difficulty rate (measuring the difficulty of mining a successful hash), the difficulty rate is adjusted roughly every two weeks to reflect the number of machines attempting to mine one BTC. This is also at the highest levels of all time; in other words, it has never been more difficult to mine a Bitcoin.

Bitcoin BTC mining difficulty

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With the next Bitcoin halving event fast approaching next year, a high difficulty rate is bullish as it will begin to induce the necessary market supply shock for the next bull run, with more miners holding fewer coins.

In fact, mining can provide a great deal of information about market funds. Looking at Bitcoin hash tapes, which highlight miner capitulation periods (probably BTC market lows), you can see that recent Bitcoin price action in the New Year has pushed BTC out of a zone. of serious miner capitulation after FTX.

Bitcoin BTC Hash Tapes
Fountain: glass node

This could be an indication that the worst of the 2022 bear market is over, and prices will trend higher in the coming months towards 2024.

With a return of the bull market on the cards, investors are scrambling to find the best altcoins with the most lucrative returns for the 2023 crypto market.

The best altcoins for the 2023 rally?

With the current market rebounds injecting new enthusiasm into the markets, some traders have started looking for pre-sales with great potential in 2023.

To this end, the cryptonews The Industry Talk team has analyzed and compiled a list of the top 15 cryptocurrencies for 2023, each with good short- and long-term prospects.

This list is regularly updated with new altcoins and ICO projects.

Disclaimer: The Industry Talk section presents information from crypto industry players and is not part of the editorial content of Cryptonews.com.


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