The cryptocurrency market is currently witnessing a substantial surge, with Bitcoin now breaking the $28,000 mark for the first time since June 2022.
Other major cryptocurrencies like Ethereum, XRP, and Cardano are also posting impressive gains. This growth comes amid macroeconomic challenges that have directly impacted the sector.
Bitcoin’s Rapid Ascent
Breaking Through Key Levels
Bitcoin’s value experienced a sharp increase on Sunday, reaching $28,000 across various crypto exchanges after surpassing the critical $27,500 level earlier in the day.
At the time of reporting, the leading cryptocurrency was trading at $28,080, an approximately 8% increase over the past 24 hours.
Ethereum and Year-to-Date Growth
Ethereum closely followed Bitcoin’s performance, with a 5% increase in value, trading at $1,813 at the time of reporting.
Notably, Bitcoin and Ether have grown 60% and 45% year-to-date, respectively, recovering all losses since the beginning of Q4 2022.
Other Cryptocurrencies Benefit from the Rally
XRP, BNB, and Cardano Gains
The upward momentum extended to other cryptocurrencies, with XRP, BNB, and Cardano each adding over 5% during the same period.
This significant rise led to liquidations worth over $164 million within 24 hours, impacting more than 45,000 short traders, according to data from Coinglass.
Macroeconomic Factors and Crypto Market Recovery
Banks’ Crisis and Regulatory Calls
The widespread rally in the crypto market comes amid macroeconomic challenges that have directly affected the sector.
The recent collapse of Silicon Valley Bank (SVB) and Signature Bank led to a sharp decline in cryptocurrencies and mounting calls from various regulators to de-bank crypto-related firms.
US Treasury and FDIC Intervention
The intervention of the US Treasury and the FDIC to ensure that all depositors of the two struggling banks would be fully compensated has stabilized the markets, resulting in a recovery for major crypto assets.
Crypto as a Safe Haven and Potential Recovery Rally
Shift to Cryptocurrency
In response to the latest banking crisis, the Federal Reserve provided $297 billion in emergency funds on March 15 to prevent further contagion in the banking sector.
This move appears to have prompted a significant shift towards crypto, with more investors viewing the sector as a safe haven to avoid a situation similar to the 2008 global financial crisis.
Increased Chances of Recovery Rally
The ongoing strength in the crypto market has raised the likelihood of a recovery rally, according to various investors.
Glassnode’s lead chain analyst, “Checkmate,” anticipates that Bitcoin will be a spot-driven market for some time, suggesting that the asset could rise higher due to the leverage volume and casino venues that were eliminated last year.
Expert Opinions on Market Direction
Critical Levels for Bitcoin
Michaël van de Poppe, CEO & Founder of crypto trading firm Eight Global, believes that Bitcoin needs to hold above $26,000 to continue its upward trajectory.
However, he emphasized that this push must occur within the next few hours; otherwise, bearish divergences could trigger a potential reversal.
