Bitcoin Up Nearly 10% Again, More Volatility Expected With CPI

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Bitcoin (BTC) bounced back from the recent drop on Sunday to rebound above $22,000. Yesterday, bitcoin suddenly made another big jump and shot above $24,000 again. However, it is still unable to break $24,500. The BTC price stands at $24,115 on Binance and $22,545 on Bitvavo at the time of writing.

This means that the bitcoin price is 9.1% up today. Trading volume increased by 29% in the last 24 hours. The total market capitalization is $469 billion and the dominance is 43.8%. The Fear & Greed Index comes out at 56 (Greed).

Is bitcoin rising due to banking crisis?

Initially, bitcoin was dragged along last week by the problems at Silicon Valley Bank and Signature Bank. In the meantime, bitcoin seems to be disconnecting itself from the more traditional markets and serving as a safe haven again.

However, the problems may not be over yet. Silicon Valley Bank is the largest borrower in the US to fail in 10 years. The Federal Deposit Insurance Corporation (FDIC) has since acquired both banks. Meanwhile, the Federal Reserve is under investigation over the fall of Silicon Valley Bank.

Bitcoin short squeeze

The problems at the banks seem to be sending investors to bitcoin for the time being. The market was decent bearish just a few days ago and the increase led to a short squeeze again.

Analyst On-Chain College reports that $30 million in short positions were liquidated in 30 minutes. In the last 24 hours, $180 million in short positions have been liquidated.

More volatility? CPI today

However, this volatile period may not be over yet. The American consumer price index (CPI) will be published this afternoon. These inflation figures could cause violent price fluctuations last year, but it is possible that the banking crisis will dampen the effect this time.

The Federal Open Market Committee (FOMC) meeting follows next week. A few days ago, most markets were still expecting a 0.5% increase after the hawkish comments from Fed Chairman Jerome Powell. Due to the banking crisis, these expectations have been completely reversed and most expect only a 0.25% increase or even a pause.

Bitcoin sentiment is starting to turn more positive

It may be too early to celebrate, but it is noticeable that sentiment has already become a lot more positive. Whether bitcoin has enough momentum in this bear market to break the $25,000 and 200-week moving average now remains to be seen. That would definitely boost sentiment.

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Disclaimer: Investing involves risks. Our analysts are not financial advisors. Always consult an advisor when making financial decisions. The information and tips provided on this website are based on our analysts’ own insights and experiences.

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