Bitcoin Breaks $26K: Is a Bull Market on the Horizon?

• Bitcoin has surged beyond $26,000 as interest rate expectations flip.
• The sudden collapse of Silicon Valley Bank and Silvergate shook the market.
• Investors are now betting that the Fed is more or less done with interest rate hikes.

Why is Bitcoin Going Up?

Bitcoin has surged beyond $26,000 as interest rate expectations flip. Inflation readings provide further impetus as investors dream of a return to lower interest environments and surging crypto prices.

The Collapse of SVB and Silvergate

The sudden collapse of Silicon Valley Bank (SVB) last week, followed by Silvergate, sent shockwaves throughout the market. This had particular implications for crypto for a couple of reasons. The first was USDC, the second biggest stablecoin on the market – revealed to have 8.25% of its reserves held in SVB, the market feared for its solvency. Thankfully, the US administration stepped in to shore up this crisis and guarantee deposits would be made whole, calming fears among investors.

Interest Rate Hikes

The banking sector wobbled so drastically it shifted market expectations surrounding future path of interest rate hikes. With such creaking evident, the market has moved to betting that the Fed is more or less done with interest rate hikes – currently implying a 72% chance of no hike at next week’s meeting according to Fed futures..

Suspicion Surrounding Rally

However there are reasons to be hesitant here too: shutdowns of three crypto banks will hurt industry; since start of year bearish developments; decoupling from other risk assets is unusual & not seen since 2021; no clear catalyst for rally; fear & greed still driving markets instead of fundamentals etc…

Conclusion

In conclusion it appears that investor sentiment around Bitcoin is mixed – with some bullishness about future prospects but also suspicion around current rally due to lack of fundamentals & prevalence of fear & greed in markets today