Bitcoin (BTC) is on the verge of reaching the $30,000 milestone, but regional banks in the United States face significant anxiety and fear. Investors are concerned about the potential for contagion following the recent struggles of PacWest, a California-based lender.
The bank’s shares have plummeted by as much as 60% overnight, causing it to reassure investors and confirm that it is in talks with potential partners and investors about a deal, as reported by The Telegraph.
Despite insisting that it has not experienced any unusual deposit flows, regional bank stocks are down by more than 5% today, with not one of the 349 banks in the sector seeing gains.
Regional Banks Take A Hit, 130 Stocks Down Over 5%
The fears surrounding regional banks are undoubtedly fueled by the recent failure and sale of First Republic Bank to JPMorgan Chase. This high-profile event has highlighted the potential risks and challenges facing smaller banks, particularly in the current economic climate.
Despite the broader concerns in the financial sector, Bitcoin has climbed above the $29,000 level, up by 1.7% in the last 24 hours, potentially fueled by the ongoing concerns surrounding the US banks.
This suggests that there may be some investors who are turning to alternative assets as a potential hedge against the risks and uncertainties in traditional financial markets, which have shown no signs of relief for the short term.
Furthermore, according to CryptoCon, a Bitcoin market analyst, the accurate BTC bull market is here. This is based on the mid-line crossover of the 3 Week Keltner Channels, a technical indicator measuring volatility and trend in Bitcoin. When BTC crosses over the mid-line, currently priced at $26,500, it is a strong signal that a bull market has begun.
Additionally, CryptoCon notes that historically, Bitcoin has not returned under the mid-line after crossing, supporting the argument that a bull market is underway. According to the analyst, this has been true, as the crossover has consistently brought months of bull market activity.
Bitcoin On The Rise As US Bank Failures Mount
Daan Crypto Trades, a cryptocurrency market analyst, has analyzed Bitcoin’s dominance and potential impact in the broader cryptocurrency market. According to the analyst, Bitcoin dominance, which measures the percentage of the total cryptocurrency market capitalization made up of Bitcoin, is currently trading at its range highs at the 48-49% area.
Daan suggests that if Bitcoin can push through this range and make new local highs, it could move toward 52% or higher. This likely leads to continuing the ongoing trend of Bitcoin dominance, which has increased in recent months.
However, the analyst notes that if Bitcoin remains range-bound between $27-30K, it could lead to a recovery in ALT/BTC pairs, seeing Bitcoin dominance come down. This would suggest that altcoins, or alternative cryptocurrencies to Bitcoin, could outperform Bitcoin in the short term.
When writing, the top cryptocurrency in the market is trading at $29,000. In the past 24 hours, there has been a total liquidation of $100 million in short positions. The question is whether Bitcoin will continue its upward trend or experience a healthy pullback to fill in the liquidity below its crucial resistance levels.
Featured image from iStock, chart from TradingView.com
