• The banking crisis following SVB’s collapse has the market pricing in lower interest rates far sooner than previously expected.
• CryptoQuant analyst Cristian Palusi suggests that the liquidity crises now plaguing commercial banks may be a “long-awaited buy signal” for Bitcoin.
• Gold and Bitcoin have risen to new heights, with gold nearly reaching $2,000 and Bitcoin surpassing $27,000.
Bank Crisis Sparks Lower Interest Rates
The banking crisis following SVB’s collapse has caused markets to price in lower interest rates far sooner than they had originally expected. This phenomenon has been dubbed an upcoming “Fed pivot” as central banks look to protect the financial system from instability.
Analysts Suggest Bank Crisis Could Be Positive for Bitcoin
CryptoQuant analyst Cristian Palusi believes this liquidity crises could be a sign of a long-awaited buy signal for Bitcoin. He noted how the implied federal funds policy rates have shortened their time frame for when they think the central bank will first cut rates again, from Q1 2024 to June 2023. Additionally, both gold and Bitcoin have seen increases in value; gold is nearing its all-time high of $2000 while Bitcoin recently surpassed $27,000.
Coinbase Premium Indicates Buy Pressure on Market
Palusci also pointed out that Coinbase’s premium could indicate an enormous amount of buying pressure on the market; it has risen 37% over the past 5 days and remains tightly correlated with cryptocurrency trades it enables.
Bitcoin Price Has Been Volatile Over Recent Months
In recent months, Bitcoin’s price hasn’t been consistent; it fell from its high of nearly $42K back in January 2021 to around $7K just one month later. Since then, however, there seems to be renewed optimism surrounding BTC as investors anticipate further gains in coming months due to increasing institutional adoption and higher demand from retail investors as well.
Bitcoin Likely To Continue Rallying
As global economies remain uncertain due to prolonged lockdowns and government stimulus packages running dry, investors are turning towards safe-haven assets like gold and cryptocurrencies such as Bitcoin as hedges against inflationary pressures – something which will likely fuel further price rises throughout 2021 if current trends continue unchanged.