Barney Frank, ex-congressman and a Signature Bank board member, said in a Monday interview with CNBC that Signature Bank was shut down to send a strong “anti-crypto message.” Thus, he affirmed the conspiracy version of CZ we mentioned on Monday Later on, CZ deleted that tweet, but it's still available at Web Archive 🤷♂️).
At the same time, the Silicon Valley Bank meltdown turned out to be the second largest bank failure after the 2008 financial crisis. Regulators were quick in their bailout decision and safeguarding all the uninsured deposits. So the 8% USDC reserves stuck in the SVB were unblocked, and stablecoin repeged, and that brought confidence back to the crypto market, initiating the current rebound.
However, panic started spreading throughout the US banking system, with customers transferring funds from smaller banks to bigger and presumably safer ones. That’s not a full-scale crisis, but it puts Fed in a situation where they need to pay some extra attention to maintaining the stability of the US banking system, so there’s much more likelihood for more ‘dovish’ policy from them, especially when newly published CPI data allows that.
Now one may expect that the Fed will pause any further rate hikes sooner rather than later. Maybe even at the next FOMC meeting. And that’s the second powerful trigger for the astonishing recovery in BTC and the broader crypto market.
Indeed, isn't it bullish in itself ☝️?
So… “Could the Silicon Valley Bank crisis actually end 'crypto winter'?” — some of us are now reasonably asking. Whether it's that straightforward or not, Trezor’s Josef Tětek believes it's "definitely good" for Bitcoin. And below is the essence of his (classic) argument in one picture:
Speaking of QE (quantitative easing – “money printer go brrr,” you know), this will generally mean an influx of liquidity to the markets. When liquidity comes back into the system, risk assets (like equities and indices) rally – and vice versa. And do you remember how correlated with U.S. stocks bitcoin has been in recent months and years?
Swissblock analysts point out that bitcoin is susceptible to global market liquidity. In that sense, they even express the vision of bitcoin as “another proxy for the state of the economy. A strong bitcoin, like the one we see, is not characteristic of a recession.” So with fresh liquidity coming, they expect to see bitcoin rally throughout Q2-Q3 2023 — just like other risk assets, but with a stronger move.
From the technical perspective too, there were some reasons for the BTC price skyrocketing. And according to this Cointelegraph piece, bitcoin derivatives data suggest a $26K resistance level won’t hold for long.
"Expanding or broadening triangles are typically bearish. According to Edwards and Magee, Technical Analysis of Stock Trends, 1948, the expanding or inverted triangle is typically a bearish manifestation."
However, Brandt does not expect any serious continuation of the bear market either:
"While in the case of bitcoin I do not think the pattern will produce a bear market, I do think that the advance from the early Jan low has gotten ahead of itself. I would anticipate a broad trading range at this time."
After all, with given historical context and in the long-term perspective,