Key Insights
- The latest in the long line of stablecoin crashes is the USDC de-pegging after last week’s series of bank runs.
- There were initial fears about Bitcoin’s ability to hold its ground around the $20,000 zone
- The bitcoin bulls managed to wrestle control out of the hands of the bears and Bitcoin trades at $25,700
- Bitcoin may be on its way to $30,000 or further lows – Is this a market recovery, or a bull trap
Bitcoin price was up by over 12% in the last week at press time as BTC traded very close to the $25,000 mark. This sudden rise in price came after a lot of conundrum around stablecoins and the infamous Silicon Valley Bank incident.
In the ever-growing world of blockchains, crypto and DeFi protocols, stablecoins have proven themselves to be an essential part of the mix. They have been used in almost every sector of the blockchain ecosystem, and have been an invaluable way to escape the effects of the crypto world’s rapid price fluctuations.
Stablecoins have become a vital component of the world of decentralized finance (DeFi). Because of their relative stability, investors simply convert their crypto-based assets into stablecoins and wait out whatever storm may be ravaging the crypto market. However, what happens when stablecoins continue to prove themselves unreliable?
Bitcoin, USDC and the Silicon Valley Bank
The latest in the long line of stablecoin crashes is the USDC de-pegging that came with the crash of Silvergate Bank, Silicon Valley Bank and Signature Bank – three major crypto-tied banks that went under, almost simultaneously last week.
USDC, normally priced at around the regular $1, sank to 87 cents after these banks went under. Ethereum’s gas fees soared, and the prices of several cryptocurrencies (and even stablecoins) swung around wildly, as investors scrambled to move their assets to safer grounds.
Hours after regulators shut down the Silicon Valley Bank amid a crypto-tied run on Saturday, crypto prices were everywhere, and the internet was abuzz.
This suggested to many, that the current bear market that has lasted since late 2021 and was already starting to show signs of recovery had only just entered a much darker phase.
After managing to hit the $25,500 zone, Bitcoin’s price did a backflip and went straight down to $19,600 in less than 24 hours.
However, things seem to be looking better this week as Bitcoin price climbed the green ladder again.
Assessing Bitcoin Performance Around $24,000
There were initial fears about Bitcoin’s ability to hold its ground around the $20,000 zone. This is especially after the cryptocurrency broke through this level and hit its 200-day simple moving average (blue line below) of around $19,600.
However, the bitcoin bulls managed to wrestle control out of the hands of the bears. The quick action of the bulls initiated a quick bounce off this zone and launched the benchmark cryptocurrency straight up towards its former highs.
Bitcoin gained momentum right after breaking through $21,500 and at the time of writing, the cryptocurrency has broken through its former $25,300 high and is now trading at $25,867.
This is an impressive turn of events, suggesting that the cryptocurrency’s performance around $20,000 is attracting buyers, and the bulls are getting stronger.
End Of Bear Market Or Massive Bull Trap?
According to data from CoinMarketCap, the cryptocurrency has performed quite well over a 24-hour and 7-day timeframe.
According to the snapshot above, the cryptocurrency has soared by an impressive 14% over the last 24 hours, and by 15% over the last day.
However, it may be too soon to rejoice just yet.
The main hurdle to overcome was the $25,250 zone (blue line), and bitcoin has done just that. It now trades at $25,600 at the time of writing, to the delight of the bulls.
However, it is very likely that the bears are laying in wait around this zone, and may attempt to sink the price of the cryptocurrency lower.
Bitcoin needs to close with a daily candle above $25,250 to initiate a clean breakout. And if the cryptocurrency does manage to break above this zone, the next overhead price target would be the $30,000 zone in a 16.5% move to the upside from where it currently sits.
However, if the bears do manage to bring bitcoin down from the $25,250 resistance, the cryptocurrency is likely to range between this zone and its 200-period simple moving average before further price action.
This leads to the question: Is this the end of the bear market and will Bitcoin rally to $30,000 as one of the first steps towards recovery?
Or will this turn out to be a massive bull trap that leads to further devastation?
Disclaimer: VoiceOfCrypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.
