Bitcoin (BTC) could be on its way to the psychological $100,000 level, as the ‘digital gold’ narrative gains more prominence as a new banking crisis unfolds in the United States .
At least 63 US banks are on the verge of bankruptcy
At least 63 U.S. banks were on the brink of bankruptcy in the first quarter of 2024, compared to 52 banks on the “distressed bank list” in the third quarter of 2023, according to a quarterly report from the Federal Deposit Insurance Corporation (FDIC). published on May 29.
Additionally, banks are collectively suffering $517 billion in unrealized losses, an increase of $39 billion from the previous quarter, which marks the ninth consecutive month of “unusually high unrealized losses,” according to the report. FDIC, which writes:
“Higher unrealized losses on residential mortgage-backed securities, resulting from rising mortgage rates in the first quarter, fueled the overall increase. This marks the ninth consecutive quarter of unusually high unrealized losses since the Federal Reserve began raising interest rates in the first quarter of 2022.
The health of the US banking system has been a growing concern since March 2023, following the sudden collapse of Silicon Valley Bank (SVB) and the voluntary liquidation of Silvergate Bank. Signature Bank was also forced to close its operations by New York regulators on March 12, two days after the liquidation of Silvergate Bank.
In response to the collapses, the Federal Reserve created the Bank Term Funding Program (BTFP) – which provides bank loans of up to one year in exchange for providing “eligible assets” as collateral.
It was this emergency measure that sparked Bitcoin’s 2023 rally, according to BitMEX co-founder and former CEO Arthur Hayes.
This has prompted investors to turn to fixed-supply assets like Bitcoin, Hayes argued during a Sept. 5 keynote at Korea Blockchain Week:
“I and the rest of the market rightly saw this as an acknowledgment that they created this problem – the structure of the banking system – and this is one way to solve it: print more money.”
Bitcoin then increased by 26%, from $21,900 to $28,054 during the week of March 13, 2023.
Additionally, the price of Bitcoin has increased by more than 148% since the start of the banking crisis in March 2023, trading around $70,000 today.
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The FDIC report validated the price action model of Jamie Coates, senior cryptocurrency analyst at Realvision, who predicted that Bitcoin would find strong support above the $63,000 mark before continuing its momentum. bullish.
Coates wrote in a June 4 article:
“After some nice price action since March, my boring Bitcoin trend model kicked in. The DXY index fell, while corporate yields and spreads declined. Do you feel that, my son? It’s the smell of central bank liquidity floating in the air…”
BTC hack targets $100,000
On the daily chart, the price of Bitcoin has been consistently hitting higher lows since early May. If this chart trend continues, Bitcoin price could reach all-time highs in the coming weeks, based on the chart below.
Based on historical chart trends, Bitcoin price could be preparing to reach the $100,000 level. For example, cryptocurrency analyst Trader Tardigrade wrote in an article dated June 5:
“I am not surprised that Bitcoin broke the recent Bull Pennant level after the Bull Flag breakout. The Bull Pennant and the Bull Flag are promising graphic models. The next increase could reach more than $100,000.
Return of Bitcoin ETF flows
Bitcoin exchange-traded fund (ETF) inflows into the United States could also contribute to Bitcoin’s bullish momentum. As of June 4, US Bitcoin ETFs recorded their 15th consecutive day of positive net flows.
Related: Bitcoin ETFs Worldwide Take Spotlight As BTC Price Surpasses $71,000
Institutional flows from ETFs have played a significant role in Bitcoin’s current rally to all-time highs. On February 15, Bitcoin ETFs accounted for about 75% of new investments in the world’s largest cryptocurrency as it crossed the $50,000 mark.
However, Bitcoin faces major resistance at the $72,000 level. According to Coinglass data, a break above the $72,000 mark would liquidate more than $922 million in cumulative leveraged short positions.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research before making a decision.
