- Amid news of another banking crisis in the US, Bitcoin and crypto posed a strong recovery breaking past crucial resistance levels.
- Nearly $11.3 million in BTC short positions have been liquidated over the last 24 hours, Bitcoin resumes its recovery to $32,000.
After facing two weeks of strong selling pressure, the world’s largest cryptocurrency Bitcoin (BTC) posed a strong recovery on Tuesday evening. In the last 24 hours, the Bitcoin (BTC) price is trading at 3.74 percent up at $28,406 and a market cap of $550 billion.
This quick recovery in the Bitcoin price came after another major US banking giant – First Republic Bank – announced that it lost $100 billion in deposits during the first quarter of 2023. It has once again triggered concerns regarding the fragility of the US banking system. Last month in March 2023, amid several banking explosions in the US, Bitcoin posed a strong recovery thereafter.
Well, the same thing repeated on Tuesday, April 25, clearly indicating that Bitcoin is emerging as a safe haven against the traditional banking system. Speaking to CoinDesk, Jake Boyle, the director of the retail crypto brokerage Caleb and Brown stated:
With First Republic Bank looking like it could go under, I suspect the market is anticipating yet more liquidity injections to prop up what certainly seems to be an American banking sector that is still very much in the throes of crisis.
Bitcoin, as a result, is front-running these expectations. Cracks in the financial system are growing, even if relatively subtly at the moment, and it’s going to be incredibly difficult for the Fed to adhere to its tightening regime going forward.
Boyle further added that BTC’s recent price rally has more to do with liquidity injections as well as the growing expectations that Fed’s monetary tightening might end soon.
Bitcoin short liquidations and key technical levels
As per the data from Coinglass, nearly $11.3 million in BTC short positions have been liquidated over the last 24 hours as the BTC price surges past $28,400. Historically, such short squeezes tend to accelerate price jumps.
Popular crypto analyst Michael Van de Poppe called the recent BTC price pullback a healthy correction adding that investors don’t need to worry as far as the BTC price stays above the crucial support of $25,300. He said that in this condition, the Bitcoin price is more likely to head towards $42,000.
Commenting on the recent price action of BTC, Poppe added: “Bitcoin did continue to hold the box at $27,000 and broke above the crucial breaker of $27,800 -> back in the range. Next resistance is $28,800. If we’ll have a slight consolidation, it seems likely that we’ll continue moving upwards to $30,000”.
Interestingly, Bitcoin is showing up greater signs of decoupling from the traditional financial market. While the S&P500 and other indices ended in the red, Bitcoin and crypto managed to pose a healthy recovery.
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