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• The banking crisis following SVB’s collapse has forced the market to price in lower interest rates far sooner than previously expected.
• CryptoQuant analyst Cristian Palusi suggests that the liquidity crises now plaguing commercial banks may be a „long-awaited buy signal“ for Bitcoin.
• Gold and Bitcoin are on the rise, with gold surging to nearly $2000 and Bitcoin reaching a 9-month high of $27,000.
The Banking Crisis
The banking crisis following Silicon Valley Bank’s (SVB) collapse has caused markets to price in lower interest rates far sooner than previously expected. This has caused an incoming Fed pivot as banks and central banks attempt to protect the financial system from further instability.
CryptoQuant Analyst’s Opinion
Analysis from CryptoQuant analyst Cristian Palusi suggests that the liquidity crises now plaguing commercial banks may be a „long-awaited buy signal“ for Bitcoin. He noted that implied federal funds‘ policy rates have shortened their time frame for when they think the central bank will first cut rates again, from Q1 2024 to June 2023.
Market Performance
Gold and Bitcoin are both on the rise: gold surged to nearly $2000 as of Friday, while its oft-considered digital successor rose to another 9-month high of $27,000. Coinbase (COIN) has risen over 37% over the last 5 days, and is known to be tightly correlated with its enabled crypto asset market trades.
Coinbase Premium Signal
Palusci noted that after SVB’s bankruptcy and related bailout, Coinbase premium indicated enormous buy pressure on the crypto asset market it enables trades for. Initially this spread could have had a double interpretation following USDC depeg, but recent price action shows it was instead a clear buy signal for bitcoin assets.
Conclusion
As bank instability continues, gold and bitcoin remain strong despite uncertainty in traditional markets – suggesting investors are turning towards cryptocurrencies as a safe haven asset during times of crisis. With Coinbase premium indicating enormous buying pressure of crypto assets, it appears that investors believe this could be an ideal time to purchase bitcoins before prices start rising again – potentially signaling what Palusci believes is a long awaited bottom in bitcoin values.
