The BTC/USD is trading at 27,908, up by 2.50% in 24 hours. The US bank crisis fueled a weekend surge and Bitcoin momentarily reached $28,000 for the first time in nine months on Monday. However, the price dropped before the US Fed decided on interest rates.
Global Banking Crisis: How Is It Impacting BTC?
The global banking sector faced significant pressure as Swiss banking giant UBS agreed to acquire its financially troubled rival Credit Suisse in a forced $3.2 billion transaction arranged by the Swiss government. This move is among the latest efforts by governments worldwide to control the crisis that threatens the banking industry.
Additionally, several central banks, including the Federal Reserve, BoE, and ECB, announced coordinated action on Sunday to boost liquidity in their existing US dollar swap deals. The goal was to make it easier to access US dollar liquidity during times of crisis, but several banking stocks plummeted afterward.
In contrast, Bitcoin has performed exceptionally well, especially after the collapse of major banks earlier this month. As a result of the banking turmoil, Bitcoin has surged, leading enthusiasts to promote the leading cryptocurrency as a safe-haven asset and digital gold.
BTC/USD has reached a nine-month high as investors consider bank concerns, with Bitcoin outperforming major bank stocks that have continued to decline.
Investors Await Federal Reserve’s Interest Rate Decision
With the US Federal Reserve’s interest rate decision looming, Bitcoin lost momentum as investors prepared to defend themselves. However, now that the Fed has decided to raise interest rates, investors are once again turning their attention to inflation.
According to CME Group experts, there is a 73.8% probability of a 25 basis points interest rate increase, while the possibility of the Fed keeping rates due to concerns about bank viability is now at 26.2%.
Furthermore, speculation that the Fed will raise interest rates has resulted in the US dollar’s rise. As a result, the US Dollar Index increased by 0.14 percent to 103.40, thereby capping BTC/USD.
Bitcoin Price
The BTC/USD pair is currently consolidating around the $27,500 level after breaking through the resistance at $27,750. If this bullish trend continues, Bitcoin may climb toward $29,250 or even $30,700.
If the support levels at $26,700 or $25,200 are broken, Bitcoin’s next support level would be at $23,150. However, despite the potential for declines, the overall trend for Bitcoin is still bullish due to the formation of bullish engulfing candles.
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