Bitcoin, the bellwether coin, has experienced another bout of volatility, with its price surging past the $26,000 mark for the first time since July 2022, only to retrace to $24,070 on the Bitstamp exchange.
Veteran trader Peter Brandt has taken to Twitter to explain that he is not surprised by such a development since the make-it-or-break-it $26,000 level got rejected.
As reported by U.Today, the market capitalization of the flagship cryptocurrency surpassed $500 billion for the first time since mid-2022.
The price of Bitcoin was boosted in part by the recent banking crisis in the United States. The current meltdown has been compared to the 2013 banking crisis in Cyprus that pushed the world's first cryptocurrency into the mainstream for the first time in its existence.
Investors continues to see Bitcoin as a safe haven asset in times of financial turmoil despite its underperformance.Due to the recent crisis, the US federal government has taken steps to reassure depositors by guaranteeing their deposits and implementing emergency measures to alleviate their concerns. Additionally, market speculation suggests that the current meltdown may prompt the US Federal Reserve to hold off on raising interest rates.
While the crypto community is bettingon on a Fed pivot, February's CPI report shows that inflation is not going away quickly. Hence, there is still a compelling need for the central bank to continue raising rates, according to economists at Bloomberg. While a 25 basis-point hike at the March FOMC meeting would be appropriate, the decision will be a tough call for the Fed amid ongoing concern about financial turmoil, with growing financial stability risks in the aftermath of the collapse of Silicon Valley Bank.