Banking Worries Propel Bitcoin: Crypto Rallies Over 2%, Eyeing $30,000 On Strongest Day In A Month
Benzinga – Bitcoin (CRYPTO: BTC) soared by more than 2.6% during Tuesday’s trading session, marking its strongest daily gain since July 13 and reaching its highest levels in two weeks. The cryptocurrency experienced a sudden surge despite the “risk-off” climate impacting U.S. banks on Tuesday, as the rating agency Moody’s issued a wave of downgrades and cautious warnings.
Even in prior instances, Bitcoin showcased a proclivity to exhibit positive reactions when concerns regarding the stability of traditional banks take center stage.
This phenomenon unfolded notably in March, when the collapse of regional banks such as Silicon Valley Bank and Signature Bank acted as a trigger for a substantial rally in the dominant cryptocurrency.
Significantly, Bitcoin experienced an impressive 38% surge between March 10 and March 17, 2023, establishing its most impressive weekly performance since the latter part of 2020.
Bitcoin’s Technical Analysis And Key Levels To Watch
The cryptocurrency is testing two important resistances on its daily chart: the $30,000 psychological mark and the 50-day moving average.
Between late July and early August, Bitcoin attempted to breach the 50-day moving average without achieving a definitive breakthrough.
The bullish attempt witnessed during the Tuesday, August 8 session was accompanied by a notable spike in the relative strength index (RSI), a popular momentum indicator. The RSI surged well past the 50 mark, reaching levels we haven’t seen since mid-July.
In 2023, whenever Bitcoin managed to decisively break above the 50-day moving average, it usually acted as a pivotal precursor to further upward movements for the cryptocurrency. This pattern held true in January, March and June of 2023, where the breakthrough acted as a springboard for periods of extended bullish momentum.
Analyzing the Fibonacci retracement levels between the lows of 2022 and the highs of 2021, the next resistance point is identified at $35,900, corresponding to the 38.2% retracement level. Following this hurdle, the critical value of $42,200 emerges as the midpoint between the November 21, 2022, low of $15,460 and the November 10, 2021, high of $69,000.
Bitcoin has risen 80% thus far this year, doubling the performance of the Invesco QQQ Trust (NASDAQ:QQQ).
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