The overall cryptocurrency market (TOTAL) delivered a double-digit gain of 15.98% with Bitcoin staging a bigger comeback, above the $21.600 key level, to a new high of $27, 756 before settling at $27, 430 as of this analysis. This rally represents 24.37% growth.
These impressive gains were largely fuelled by data showing that the US Fed seems to have pumped more dollars into the economy to shore up the liquidity in the banking sector, a crisis that began with the collapse of Silicon Valley Bank is now exposing more top-ranked banks like Credit Suisse to risk of a bank run.
Fed data on Thursday showed banks sought record amounts of emergency liquidity in recent days, which helped undo months of central bank effort to shrink the size of its balance sheet.Source: TradingView
The fact that the Fed has been very proactive in terms of opening the liquidity tap is potentially bullish for the crypto market.
Banks have requested emergency funds of up to $300 billion from the government and it’s been reported that this figure is close to the bailout funds injected during the Covid crisis in 2020 before BTC skyrocketed from $4,000 to $60,000.
All these events have added pressure to the ongoing crash of the 10-year treasury yield to recent lows.
As of now, the yield is down by 7.21% to 3.436%, an important key level that defines the next major direction next week.
Market forecast for the week:
The 10-year treasury is at a critical point that’s not only support levels (tested 3x in December 2022, January 2023 and February 2023 before the uptrend resumed) but also touching the 200-day average of 3.422%.
One of these events will definitely play out next week;
First, if the yield breaks these key support levels to the downside, and dips below 3.30%-3.20% as a result of increased accumulation of Treasury bonds, Bitcoin may break out of the next key resistance of $28, 450 to test $32, 200, that’s like 17.75% upside from the current price of $27, 430.
On the flip side, a bounce from the 200-day average, on a higher-than-expected rate hike, should help the yield stage a u-turn to the 3.9-4% level, hence attracting a crypto sell-off with BTC reversing back to $25, 200.
And if it fails to hold here, we may see further selling to the downside, $21,600.
But for now, the trend favours the bull.