Between cryptocurrency and traditional asset class investors, Bitcoin may actually be a viable safe haven against potential disruption of traditional fiat-based fractional reserve banking systems. The story is building, helping BTC to hit multi-month highs against its major altcoin peers this week. .
According to TradingView, bitcoin’s dominance (i.e., the percentage of total cryptocurrency market capital held by bitcoin) surpassed 45.5% on Wednesday, reaching its highest level in nine months. This comes after the BTC/ETH exchange rate hit its highest level since November earlier this week around 3pm.
Meanwhile, BTC/BNB is nearing its highest level since August last year at around 80, BTC/XRP is at over 62,200, its highest level since September last year, and BTC/ADA is at its lowest level since early 2021. Blockchaincenter.net’s Altcoin Season Index has thus plummeted from his late February high in the 47 area to “Bitcoin Season” (defined as a score below 25 with a current score of 22).
Can Bitcoin Reach $30,000?
Bitcoin’s leap in dominance comes after the cryptocurrency reached its highest level since June last year in the mid-$26,000s earlier this week, surprising from last week’s dip to a two-month low below the $20,000 level. Last week’s decline was triggered by a broader risk-off tide after a string of bankruptcies in crypto/tech-friendly US banks.
Analysts believe this week’s recovery was driven by a combination of bullish factors: a return to the $1 peg;
The aforementioned narrative of Bitcoin being a safe haven against the troubles of the traditional financial system also helps, just as it is advertised as boosting Bitcoin against major cryptocurrency rivals. What caused the rebound, analyst price forecasts have become significantly more bullish.
Technical signals look good. Bitcoin has bounced back strongly from the recent retest of his 200DMA and realized price (both just under $20,000). The next resistance area in the $28,000 area.
As discussed in this recent article, on-chain indicators that can signal when a bear market is over will continue to send good signals. Metrics related to Bitcoin’s on-chain activity (daily transactions, new address creation, daily active users, number of addresses with non-zero balances, etc.) also generally continue to trend positive.
Traders will continue to monitor the health of the US and global financial systems, and signs of further cracks could further spur Bitcoin’s rally. Federal Reserve next week This week’s US CPI and CPI (a good thing for the Fed) will be a key event to watch as they give room for a slightly weaker outlook for tightening. This could be another tailwind for Bitcoin.
If Bitcoin can reach and surpass the $28,000 resistance, the door will open above $30,000 to the next major resistance in the $32,500 to $33,000 area.