• The banking crisis following SVB’s collapse has the market pricing in lower interest rates far sooner than previously expected.
• Analysis from CryptoQuant analyst Cristian Palusi suggests that the liquidity crises now plaguing commercial banks may be a „long-awaited buy signal“ for Bitcoin.
• Coinbase (COIN) has risen over 37% over the last 5 days, and is known to be tightly correlated with the crypto asset market that it enables trades for.
Silicon Valley Bank Collapse
The banking crisis following Silicon Valley Bank’s (SVB) collapse has caused markets to price in lower interest rates much sooner than initially anticipated. This has forced central banks to protect the financial system, leading to speculation of an incoming Fed pivot.
Bitcoin Buy Signal?
CryptoQuant analyst Cristian Palusi believes that the liquidity crises faced by commercial banks could potentially act as a “long-awaited buy signal” for Bitcoin. Additionally, gold and Bitcoin have both seen recent surges – with gold reaching nearly $2000, and Bitcoin hitting another 9 month high of $27,000.
Palusci also noted that the Coinbase premium could be interpreted as a clear buy signal after its depeg from USDC. Coinbase has risen over 37% in the past 5 days and is seen to have strong correlations with other crypto assets it facilitates trades for.
Implications of Market Action
These developments suggest that investors are increasingly optimistic about cryptocurrency prices due to their expectations of an upcoming Fed pivot as well as potential long-term benefits of digital assets such as Bitcoin.
The current market action implies that investors are becoming more confident in cryptocurrencies and digital assets such as Bitcoin due to their expectation of an imminent Fed cut and potential long-term benefits of these digital currencies.