Bitcoin (BTC) may be on its way to reaching the milestone of $100,000 as the narrative of it being “digital gold” gains traction amidst another impending banking crisis in the United States.
According to the Federal Deposit Insurance Corporation’s (FDIC) quarterly report released on May 29, at least 63 U.S. banks were teetering on the edge of insolvency in the first quarter of 2024, compared to 52 banks on the “Problem Bank List” in the third quarter of 2023. These banks collectively hold $517 billion in unrealized losses, a $39 billion increase from the previous quarter, marking the ninth consecutive month of elevated unrealized losses.
The concerns surrounding the U.S. banking system escalated in March 2023 after the sudden collapse of Silicon Valley Bank and the voluntary liquidation of Silvergate Bank. Signature Bank also faced closure by New York regulators on March 12, just two days after Silvergate Bank’s liquidation.
In response to these collapses, the Federal Reserve introduced the Bank Term Funding Program, providing banking loans of up to a year in exchange for posting “qualifying assets” as collateral. This emergency measure kickstarted the Bitcoin bull run in 2023, as highlighted by BitMEX co-founder and former CEO Arthur Hayes during a keynote speech at Korea Blockchain Week.
Since the onset of the banking crisis in March 2023, the price of BTC has surged over 148% to trade at approximately $70,000 today. Jamie Coutts’ price action model, validated by the FDIC’s report, anticipates Bitcoin to establish strong support above $63,000 before embarking on further upward movement.
Based on the daily chart, Bitcoin has been consistently forming higher lows since the beginning of May, suggesting a potential breakout to new all-time highs in the coming weeks. Historical chart patterns indicate that Bitcoin could be gearing up for a move towards the $100,000 mark, as noted by crypto analyst Trader Tardigrade.
Additionally, the inflows from U.S. Bitcoin exchange-traded funds (ETFs) could also contribute to Bitcoin’s upward trajectory. Institutional inflows from ETFs played a significant role in the recent Bitcoin rally to new highs, with Bitcoin ETFs accounting for approximately 75% of new investments in the cryptocurrency when it surpassed $50,000.
Despite the positive outlook, Bitcoin faces a significant resistance level at $72,000, with a break above this point potentially liquidating over $922 million worth of leveraged short positions, according to Coinglass data.
It’s important to note that this article does not offer investment advice. Every investment and trading decision carries risks, and readers are encouraged to conduct their own research before making any decisions.