federal reserve

CPI to spark dollar ‘massacre’ — 5 things to know in Bitcoin this week

Bitcoin seals its highest weekly close in ten months as CPI prepares to inject fresh volatility into BTC price and beyond.

Bitcoin (BTC) starts the week on a firm footing as bulls send BTC price to a new 10-month high weekly close.

After a relatively calm week, last-minute volatility is getting traders excited at the prospects of a repeat attack on $30,000 resistance — but a lot stands in the way.

In what is set to be a significant week of macroeconomic data releases, the Consumer Price Index (CPI) print for March is due April 12, along with fresh insights into Federal Reserve policy.

Add to that the Ethereum Shanghai upgrade and it’s a recipe for volatility. How will Bitcoin react?

Volatility correlations between the largest cryptocurrency and traditional risk assets are inverting, data shows, while sentiment data also suggests little appetite for sudden selling among the hodler base.

Cointelegraph takes a look at the status quo in the run-up to what promises to be a week that keeps market participants on their toes.

CPI headlines key macro data week

A familiar event leads the week’s macro calendar, with U.S. CPI data due for March.

The release, this time on April 12, traditionally accompanies heightened volatility in risk assets, making that date a key area to watch for “fakeouts” in crypto markets.

The Federal Reserve will further produce the minutes of its latest Federal Open Market Committee (FOMC) meeting, during which it opted to continue raising interest rates.

The environment is thus somewhat complicated when it comes to CPI’s impact on asset performance. While traders want to see inflation receding faster than expected, the Fed itself remains hawkish, last month confirming that further interest rate hikes may be appropriate.

However, a divergence between the Fed and markets is equally evident, with sentiment beginning to show that the latter simply does not believe rate hikes will continue much longer.

According to CME Group’s FedWatch tool, next month’s FOMC meeting will likely end in a repeat 0.25% hike. Those odds are highly flexible and react immediately to any new macro data releases, CPI included.

Fed target rate probabilities chart. Source: CME Group

For macroeconomic and stock market analyst James Choi, there is another side to the inflation story, one involving a traditional headwind for crypto: the U.S. dollar.

This week’s release will set dollar strength on a three-month freefall, he warned on April 10, paving the way for some potential further relief on risk assets.

“People seem to have no idea how the $USD $DXY will fall in the next 3 months,” he commented on a U.S. Dollar Index (DXY) chart originally shared in late 2022.

“And this massacre will begin with this week’s CPI report. Mark my words, mark them well…”

U.S. dollar index (DXY) annotated chart. Source: James Choi/ Twitter

Others are eyeing Q1 bank earnings as a source of potential knee-jerk market reactions, among them Jim Bianco, president of macro analysis firm Bianco Research.

In part of a Twitter commentary, Bianco predicted that the earnings would be “bigger than CPI.“

Bitcoin price volatility on the up

If volatility is what traders want, they arguably already have it in abundance, data shows.

According to market data resource Kaiko, Bitcoin is on a diverging path from equities when it comes to volatility, increasing action while the Nasdaq cools.

The events of last month, centered around the unfolding U.S. banking crisis, were enough to send the “gap” between Bitcoin and Nasdaq 30-day rolling volatility to its highest levels in a year.

Bitcoin vs. Nasdaq correlation chart. Source: Kaiko/ Twitter

Bitcoin’s correlation with gold, Kaiko revealed last week, is now higher than with the S&P 500.

Bitcoin correlation annotated chart. Source: Kaiko/ Twitter

Kaiko added that Bitcoin’s inverse correlation to the U.S. dollar is also rapidly unwinding.

“Although BTC remains negatively correlated with the US Dollar, the correlation is now almost negligible, falling from -60% to -23% YTD,” part of Twitter commentary read at the weekend.

Bitcoin vs. DXY volatility chart. Source: Kaiko/ Twitter

BTC price sets new 10-month high weekly close

Bitcoin offered a late surprise into the April 9 weekly close, with BTC/USD making last-minute gains to seal the candle at just above $28,300 on Bitstamp, data from Cointelegraph Markets Pro and TradingView shows.

BTC/USD 1-week candle chart (Bitstamp). Source: TradingView

This is impressive in itself, marking fresh ten-month highs for weekly closes as bears are continually denied a return to lower levels.

“Bitcoin still holding the lower area of support, and still following the path,” Michaël van de Poppe, founder and CEO of trading firm Eight, wrote as part of his latest analysis.

“Everyone wants to long $25K, but I think we won’t be getting it. No clear bearish divergences either on higher timeframes. Retest of $28.6K & most likely breakout to $30K+.”

BTC/USD annotated chart. Source: Michaël van de Poppe/ Twitter

During the close, BTC/USD managed to hit local highs of $28,540 before returning to consolidate below the closing level.

Van de Poppe remains optimistic about the short-term prospects.

“Bitcoin consolidated at support and runs to $28,500. Another test of $28,600-29,000 and we’ll most likely breakout significantly,” he continued.

“More importantly; confidence comes back in the markets then, so you’ll see more Altcoins starting to break out.”

Related: Crypto winter can take a toll on hodlers’ mental health

In his own appraisal of longer-term market strength, popular trader and analyst Rekt Capital described Bitcoin as “very well positioned” to make further gains.

When it comes to price action in 2023 so far, however, he remains conservative, noting the ongoing potential for BTC/USD to form a “double top” structure and return toward its yearly open.

“Still unclear whether BTC is forming a Double Top here,” he summarized alongside an explanatory daily chart.

“Either side of the Double Top formation is approximately equal, though this more recent part is becoming a bit longer. If this second part becomes even longer, it could distort the pattern altogether.”

BTC/USD annotated chart. Source: Rekt Capital/ Twitter

Ethereum Shanghai upgrade looms

As Bitcoin market dominance sees a return to form, BTC may see an internal source of friction this week as Ethereum prepares to undergo its Shanghai hard fork.

ETH/USD 1-day candle chart (Bitstamp). Source: TradingView

Cointelegraph has extensively reported on the event, which will unlock — and open up for sale — around $2 billion in Ether (ETH).

Analysts are classically divided over how intense the resulting sell-side pressure might be. Some soberer takes argue that there will be few incentives for holders to exit the market.

“For those looking to ‘sell the news’ after the Shanghai upgrade, staked ETH will take around 1 year+ to be completely unlocked, it will be on a first come first served basis,” analytics account The Modern Investor summarized on Twitter.

“Those who started in 2021 will be released first. Caution: You’ll just be selling your ETH to whales.“

While ETH/USD recently hit its highest levels since August, attempting to snatch $2,000, ETH/BTC is struggling to lift off from ten-month lows.

ETH/BTC 1-day candle chart (Bitstamp). Source: TradingView

“Rejected,“ popular trader Cheds reacted to the latest events on the ETH/BTC daily chart.

Sustainable greed?

Despite crypto market sentiment being at its most “greedy” since the BTC/USD all-time highs of November 2021, there are some encouraging signals from hodlers.

Related: Bitcoin traders expect ‘big move’ next as BTC price flatlines at $28K

These come courtesy of research firm Santiment, which at the weekend noted an ongoing trend that echoes hodler action from earlier that year as Bitcoin headed into unknown price territory.

“There is a rising rate of Bitcoin hodlers as traders seem to have become increasingly content in keeping their bags unmoved for the long-term,” it stated.

“We saw a similar trend from January, 2021 through April, 2021 when $BTC rose above $64k for the first time.“

During Q1 2021, crypto market “greed” was much more intense, with the Crypto Fear & Greed Index spending much of the time near its maximum levels — traditionally a warning that a correction is due.

Crypto Fear & Greed Index (screenshot). Source: Alternative.me

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Historical Bitcoin price fractal hints at rally toward $50K

Bitcoin’s price in 2023 is mirroring a 2015 fractal that saw BTC price doubling from $350 to $700 in seven months.

Bitcoin (BTC) could rally toward $50,000 in 2023, according to a historical price fractal highlighted by popular market analyst Mags.

Bitcoin price trend in 2015 vs. 2023

The chart fractal highlights the similarities between Bitcoin’s ongoing price trends and those recorded after the completion of the 2013–2015 bear market.

That includes Bitcoin’s consolidation inside the $200–$300 range between January 2015 and August 2015, which appears identical to its consolidation between the $18,500–$25,000 range after the supposed completion of its 2021–2022 bear market.

BTC/USD price performance comparison between 2015 and 2023. Source: TradingView/Mags

BTC’s price broke above the $16,000–$25,000 range in March 2023, prompting Mags to highlight its resemblance to the breakout above the $200–$300 range in October 2015.

Since this resulted in a rally toward $700 in June 2016, the analyst sees the scenario potentially repeating in 2023, with BTC’s price doubling to $50,000.

“Being bearish here [when Bitcoin’s price is around $28,000] is like being bearish at $350,” Mags added.

Liquidity crunch may spoil Bitcoin price rally

The bullish argument for Bitcoin comes amid anticipations that the United States Federal Reserve would slow the pace of its interest rate hikes.

Due to lower rate expectations, the yield on the benchmark U.S. 10-year Treasury note has declined. That, in turn, has boosted investors’ appetite for zero-yielding assets, such as Bitcoin and gold.

U.S. 10-year weekly chart versus BTC/USD and XAU/USD. Source: TradingView

In addition, lower yields have also sapped U.S. dollar demand, with the dollar losing 1.33% in 2023 versus a basket of top foreign currencies. Since Bitcoin’s value is largely denominated in the dollar, it means higher prices for BTC/USD.

Related: Latest Bitcoin price data suggests double top above $200K in 2025

However, Bloomberg analyst Mike McGlone has cautioned about a potential bull trap in the Bitcoin market due to a mounting liquidity crunch.

He said:

“It may be illogical to expect the stock market, crude oil, copper, and the Bloomberg Galaxy Crypto Index (BGCI) sustain the recent bounces with year-over-year measures of money supply and commercial bank deposits falling around 2%.”

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Bitcoin rests at $28K as US jobs data boosts new Fed rate hike bets

Bitcoin price action does not warm to nonfarm payrolls numbers as analysts predict the Fed continuing to hike interest rates in May.

Bitcoin (BTC) showed little interest in moving higher at the April 7 Wall Street open as fresh United States macro data boosted bets on further interest rate hikes.

BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView

Analyst: Fed will keep hiking “until something breaks”

Data from Cointelegraph Markets Pro and TradingView followed BTC/USD as it drifted around $27,900 on Bitstamp.

U.S. nonfarm payrolls figures, the main macro data focus of the week, came in slightly below expectations, indicating unemployment rising more slowly than predicted.

This in turn raised market expectations that the Federal Reserve would persist in raising interest rates to combat inflation — at the expense of crypto and risk asset performance.

The odds of another 25-basis-point rate hike in May topped 70% on the day, according to CME Group’s FedWatch Tool, having previously circled 50%.

“Another strong jobs report. Likely fuels speculation of a 25bps hike in May,” analytics resource Tedtalksmacro reacted on Twitter.

Fed target rate probabilities chart. Source: CME Group

Caleb Franzen, senior market analyst at Cubic Analytics, concluded that this and other recent employment data showed that there were not “any major holes in the labor market data (yet).”

“They’re going to keep going until something breaks,” he continued about Fed policy in part of a follow-up analysis on Twitter.

“So far, the banks are chilling & intervention has worked. Depositors aren’t worried. The labor market is still too resilient and inflation is too high, though it’s decelerating. Disinflation is fully underway, but the Fed is bound by their own handcuffs.”

Related: Crypto winter can take a toll on hodlers’ mental health

Just ahead of the report, monitoring resource Material Indicators uploaded order book data from Binance, which showed strengthening liquidity nearer the spot price.

This, as Cointelegraph reported the day prior, was apt to further “dampen” volatility.

BTC/USD order book data (Binance). Source: Material Indicators/Twitter

Dollar bounces with stocks

Elsewhere, U.S. equities traded up on the day, with the S&P 500 and Nasdaq Composite Index gaining 0.4% and 0.8%, respectively, at the open.

Related: Bitcoin ‘faces headwinds’ as US money supply drops most since 1950s

The U.S. dollar managed an uncharacteristic copycat bounce, meanwhile, heading back above the 102 mark to hit its highest levels in several days.

“$USD strength still showing up fresh higher-high after the NFP report,” analyst James Stanley wrote in part of a Twitter response.

“$DXY reacting with strength to data that isn’t necessarily all that strong.”

U.S. dollar index (DXY) 1-hour candle chart. Source: TradingView

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

White House hopeful RFK Jr. says instant payments may lead to ‘financial slavery’

President John F. Kennedy’s nephew also worries that the government will seize the public’s Bitcoin.

Robert F. Kennedy Jr. filed documents with the United States Federal Election Commission on April 5 to run as a Democratic presidential candidate in 2024, according to multiple news reports. He is expected to officially announce his candidacy on April 19 in Boston, Massachusetts. As reports of his candidacy spread, Kennedy tweeted his position on central bank digital currency (CBDC).

Kennedy, the nephew of former U.S. President John F. Kennedy and son of former U.S. Attorney General Robert F. Kennedy, is an environmental lawyer who gained notoriety as an anti-vaccination activist. By running for the Oval Office, he would challenge current President Joe Biden, also a Democrat.

Also on April 5, Kennedy posted a tweet on the perceived dangers of CBDC. While CBDC is becoming an increasingly political issue in the United States, Kennedy’s statement stood out for its bluntness. There was also some factual confusion.

“The Fed just announced it will introduce its ‘FedNow’ Central Bank Digital Currency (CBDC) in July,” Kennedy began. While the Federal Reserve said it will launch the FedNow instant payment system in July, it will not be a CBDC and is often seen as a competitor to a potential future government-backed CBDC.

The Federal Reserve has repeatedly stated that it would issue a CBDC only with a Congressional mandate.

In line with many opponents of CBDC, Kennedy paints a worst-case scenario of a “CBDC tied to digital ID and social credit score,” disregarding the numerous design options for a privacy-protecting CBDC. The introduction of FedNow “is the first step in banning and seizing bitcoin as the Treasury did with gold 90 years ago today in 1933,” he concluded.

Related: CBDCs ‘threaten Americans’ core freedoms’ — Cato Institute

Kennedy is far from alone in his opposition to CBDC. Many CBDC opponents are on the Right, however. The Republican governor of Florida, Ron DeSantis — whom many expect to enter the 2024 presidential race — stated in a speech that “the central bank digital currency is all about is surveilling Americans and controlling behavior of Americans.” Republican Representative Tom Emmer introduced the CBDC Anti-Surveillance State Act into Congress in February. Senator Ted Cruz has also introduced a bill to block the development of a retail CBDC.

Massachusetts Democratic Senator Elizabeth Warren is running for reelection on a strong anti-cryptocurrency platform. She is possibly the most vocal opponent of cryptocurrency in U.S. Congress but has expressed her support for CBDC. In light of his intention to announce his candidacy in Boston and his family’s strong ties to the state, Kennedy also seems likely to run as a candidate from Massachusetts.

Magazine: Bitcoin in Senegal: Why is this African country using BTC?

Will Bitcoin break above $30K? New JOLTS data, weaker dollar boost chances

Bitcoin price is poised to reach $31,000 in April amid a lower vacancy turnout in the U.S., which risks crashing the dollar strength index to a yearly low.

On April 4, the U.S. Dollar Index (DXY), which measures the greenback’s performance versus a basket of six leading foreign currencies, dropped by 0.5% after demand for workers in the world’s largest economy declined.

BTC’s price eyes breakout with dollar at two-month lows

Bitcoin (BTC) has since grown 3.5% to around $28,800, continuing its extremely negative correlation with the dollar. The BTC/USD pair now eyes a breakout at $30,000, a psychological resistance level, due to hopes that the greenback will weaken further in 2023.

DXY vs. BTC/USD year-to-date returns and correlation coefficient. Source: TradingView

Meanwhile, the February Job Openings and Labor Turnover Survey (JOLTS) showed that the number of official job vacancies dropped below 10 million for the first time since May 2021.

In other words, while two jobs were available for each unemployed person at some point last year, there are now just 1.67.

U.S. vacancies for each job seeker. Source: Bloomberg

Interestingly, the implicit federal funds rate for January 2023 declined after the latest JOLTS data was published, in a similar fashion amid March’s bank failures.

The rate expectations are now around 4% compared to about 5% before the banking crisis, suggesting the market expects the Federal Reserve to stop, if not reverse, its interest rate hike program.

Implicit federal funds rate drop after JOLTS data. Source: Bloomberg

Worth noting is that the JOLTS readings are backward-looking, meaning the latest data does not include March’s sudden wave of bank failures and well-publicized layoffs at McDonald’s, Walmart and across technology companies, including Amazon and Apple.

Thus, the market is likely to see even worse JOLTS data in the next few months. This may also line up with the next Federal Open Market Committee meeting in May, prompting a dovish response, as a Reuters poll of forex strategists anticipates.

Lower rates should pressure the dollar downward and, in turn, Bitcoin higher, as long as their traditionally inverse price correlation remains. 

Bitcoin’s price painting bullish continuation pattern

From a technical perspective, Bitcoin’s price eyes an extended price rally in April as it paints an ascending triangle pattern.

Related: Bitcoin breakout ‘matter of time,’ says analysis with BTC price at $28K

An ascending triangle is a bullish continuation pattern that appears when the price trends between a horizontal trendline resistance and a rising trendline support.

It completes when the price breaks out of the triangle in the direction of the previous trend and rises by as much as the triangle’s maximum height.

BTC/USD daily price chart featuring ascending triangle breakout setup. Source: TradingView

Applying the scenario on the ongoing BTC price trend brings $31,000 as its next upside target, up around 8.5% from current price levels.

Meanwhile, the DXY has the potential to drop by another 1% in April to test the lower range of its long-standing support channel (purple) at around 100.86.

DXY daily price chart. Source: TradingView

The lower rate scenario risks pushing DXY below the support channel to a new yearly low, with some analysts anticipating a drop toward 95.

Ultimately, such a scenario will likely mean another leg-up for the cryptocurrency markets and a potential $35,000 target for Bitcoin in Q2.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Bitcoin touches $29K! Why BTC is unaffected by regulatory pressure

Join us as we discuss the significance of Bitcoin reaching $29,000 and why it seems to be unaffected by all the regulatory pressure and collapsing banks.

In this week’s episode of Market Talks, Cointelegraph welcomes Brent Xu, founder and CEO of Umee — a decentralized finance hub built on the Cosmos SDK that offers tools for macro-level borrowing and lending applications. Before founding Umee, Xu led strategy at Tendermint while setting the strategic roadmap and partnerships for the Cosmos Ecosystem.

We start things off with our main topic for today: Bitcoin (BTC) touched $29,000, a new high for 2023, despite recent United States regulatory crackdowns on crypto firms and related uncertainty. This could also suggest the crypto market does not seem too bothered about the Commodity Futures Trading Commission’s lawsuit against Binance and its CEO Changpeng “CZ” Zhao. Even the Crypto Fear & Greed Index — which aims to numerically present the current “emotions and sentiments” toward Bitcoin and other large cryptocurrencies — has been steadily increasing over the last month despite wobbles in the global banking sector. What does all this really mean for the crypto space, though? Should investors not be so worried about regulations?

This week Saudi Arabia, Kenya, Pakistan, Russia, India and Brazil decided to settle trade in their own currencies rather than the United States dollar. Why have they decided to do this, and will it have a significant impact on the U.S. and the dollar? Will there be any ramifications for the crypto space, if any?

We ask Xu what his vision is for how DeFi protocols and crypto exchanges intend to build out their own banking services in the future. Centralized crypto exchanges are under all sorts of pressure from regulators at the moment, yet we still see Fidelity Investments expanding its offerings, and Nasdaq is getting close to launching its crypto custody platform. We also get Xu’s thoughts on Fidelity Investment’s recent expansion.

There is a lot going on at the moment as far as regulations in the crypto space are concerned, mostly cracking down on the crypto sector. We ask Xu what his long-term vision is for the future of the regulated crypto space in the United States.

The United States Federal Reserve seems to be in an unending fight against inflation. The interest rate hikes don’t seem to have an end in sight either. Is the Fed losing its fight? At what point will we see a pause in interest rate hikes, and how realistic is it for the Fed to achieve its objectives for this year?

We cover all this and more, so make sure to stay tuned until the end. Market Talks airs every Thursday at 12:00 pm ET (5:00 pm UTC). Each week, it features interviews with some of the most influential and inspiring people from the crypto and blockchain industry. So, head on over to Cointelegraph Markets & Research’s YouTube page and smash those Like and Subscribe buttons for all our future videos and updates.

Elon Musk slams ‘heavy-handed’ Fed as ex-BitMEX CEO sees $1M BTC price

Bitcoin-friendly Musk is no fan of the Fed’s inflation policy, he reveals, as Arthur Hayes says U.S. economic decisions are sending BTC price on a path to $1 million.

The United States Federal Reserve has been “too heavy-handed” in taming inflation, said pro-Bitcoin (BTC) Tesla and Twitter CEO Elon Musk.

In a Twitter debate on March 29, Musk directly criticized U.S. macroeconomic policy, including “excess government spending.”

Musk: Fed policy is a “serious issue”

Bitcoin and crypto markets remain extremely sensitive to Fed cues on interest rate policy.

Despite inflation gradually coming down, the Fed has continued to hike rates even as banks feel the pressure and several collapses.

For Musk, this is already a case of going too far — with banking crisis contagion spreading to Europe, the U.S. dollar, he agrees, is quickly losing appeal.

In a response to a thread on dollar supremacy by Genevieve Roch-Decter, CEO of financial insights firm Grit Capital, Musk did not mince his words.

“Serious issue,” he wrote about the greenback potentially losing its status as the world’s reserve currency.

“US policy has been too heavy-handed, making countries want to ditch the dollar.”

His words come as various countries enact a shift away from U.S. dollar trade, these focused on China, which has begun transacting in yuan with foreign partners.

A further tweet from Musk added that the problem was made worse by the Fed, “Combined with excess government spending, which forces other countries to absorb a significant part of our inflation.”

Related: US enforcement agencies are turning up the heat on crypto-related crime

Markets remain split over how the Fed will act in the future. With the next rate hike decision not due for over one month, bets almost equally favor another 25-basis-point hike and a pause, according to data from CME Group’s FedWatch Tool.

Fed target rate probabilities chart. Source: CME Group

Fed fuels hyper-bullish BTC price bets

Some believe that given the severity of the banking crisis, the U.S. will have little choice but to reverse its policy.

Related: Bitcoin spikes above $29K as ‘fakeout’ fuels BTC price strength doubts

Among the most vocal is Arthur Hayes, former CEO of crypto exchange BitMEX, who earlier this month released a dedicated roadmap covering how he thinks events will unfold.

In one of several recent tweets, Hayes doubled down on the rosy future for Bitcoin as result, giving a price target of $1 million.

Amid regulatory attention for fellow exchange Binance, meanwhile, he described BTC price action in 2023 as a “bull market powered by FUD.”

BTC/USD traded at around $28,300 at the time of writing on March 30, according to data from Cointelegraph Markets Pro and TradingView.

BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Crypto-friendly banks mismanaged traditional risks, FDIC head tells Senate hearing

It all started with FTX, FDIC head Martin Gruenberg said; he emphasized that the American banking system remains sound.

The United States Senate Banking Committee held a hearing on March 28 regarding the regulatory response to recent bank failures. Officials from the Federal Deposit Insurance Corporation (FDIC), Federal Reserve and Treasury testified. FDIC chair Martin Gruenberg spoke about the causes of the failures of Silicon Valley Bank (SVB) and Signature Bank, including the role of digital assets and the agency’s responses to the crisis.

High levels of uninsured deposits and rapid growth were common factors in the bank collapses in March, Gruenberg said. Gruenberg’s narrative began with the closing of digital asset-focused Silvergate Bank, which was announced on March 8, although that story began with the bankruptcy of FTX.

FTX represented less than 10% of Silvergate Bank’s total deposits, but the bank lost 68% of its deposits in the aftermath of FTX’s bankruptcy, setting off a fatal chain of events for the bank. Gruenberg said:

“The troubles experienced by Silvergate Bank demonstrated how traditional banking risks, […] when not managed adequately, could combine to lead to a bad outcome.”

The FDIC was informed of the run on SVB on the evening of Thursday, March 9. SVB closed on March 10 and the FDIC worked with the bank throughout the weekend, succeeding in reopening the bridge bank the following Monday. Gruenberg noted that, like Silvergate Bank, SVB had concentrated its activities in a single sector — venture capital firms.

Related: Adoption and nerves — Crypto pumps amid banking crisis

Signature Bank was more diversified than Silvergate Bank or SVB. That was partly because of the bank’s decision to reduce its exposure to digital assets after the FTX bankruptcy and media scrutiny of the bank’s ties to the crypto exchange. The bank received more negative attention related to FTX in February, when it was sued for allegedly facilitating FTX’s commingling of accounts.

Deposit outflows from Signature Bank began March 9 and became acute the following day, Friday, with about 20% of deposits being withdrawn in hours. Management was unable to provide accurate financial data and the situation deteriorated. Gruenberg said:

“Resolution of the negative balance required a prolonged joint effort among Signature Bank, regulators, and the Federal Home Loan Bank of New York to pledge collateral and obtain the necessary funding from the Federal Reserve’s Discount Window to cover the negative outflows.”

“This was accomplished with minutes to spare before the Federal Reserve’s wire room closed,” he added.

Gruenberg noted that Silvergate Bank and Signature Bank used digital platforms that made it possible to carry out transactions round-the-clock. They were “the only two known platforms of this type within U.S. insured institutions.”

Gruenberg gave a preliminary estimate of $22.5 billion for the cost to the Deposit Insurance Fund for resolving SVB and Signature Bank losses. Echoing several government officials in recent days, he added:

“The state of the U.S. financial system remains sound despite recent events.”

The FDIC will release a comprehensive report on the deposit insurance system; the FDIC’s chief risk officer will release a report on the corporation’s supervision of Signature Bank by May 1. In addition, the FDIC will issue a proposal on new rulemaking on the special assessment that month.

The other speakers at the hearing gave briefer testimony. Treasury Under Secretary for Domestic Finance Nellie Liang described how the Treasury engaged with the FDIC and the Federal Reserve during the bank failures. Fed Vice Chair for Supervision Michael S. Barr discussed in fairly technical terms the failure of SVB and the subsequent steps taken by the government.

Magazine: Can you trust crypto exchanges after the collapse of FTX?

Will BTC ditch the bear market? 5 things to know in Bitcoin this week

Bitcoin price is gearing up for a key monthly close that could see it dump its 2022 bear market for good.

Bitcoin (BTC) enters the last week of March in uncertain territory as a strong weekly close still keeps $30,000 out of reach.

The largest cryptocurrency has sealed seven days of practically flat performance despite some volatility in between as the market seeks fresh direction. Where could it go next?

In what was a week of more surprises from the macroeconomy, BTC/USD spent much time reacting to decisions from the United States Federal Reserve and associated commentary.

Next up, however, is a period of relative calm, followed by a key monthly close, which analysis says could see the start of a new bullish trend.

Bitcoin is currently up 20% for March, meaning that the coming days will decide the strength of the ongoing recovery from multi-year lows.

Cointelegraph takes a look at five key topics to bear in mind during the final week of what has been a volatile month.

Countdown to Bitcoin price monthly close

Bitcoin managed to close the week with a modest flourish, returning to the $28,000 mark, data from Cointelegraph Markets Pro and TradingView shows.

BTC/USD 1-week candle chart (Binance). Source: TradingView

This meant that BTC/USD stayed practically unmoved versus the weekend prior, delivering some impressive stability despite the periods of volatility which occurred in the intervening period.

Nonetheless, concerns are brewing that the market may struggle to preserve current levels.

In a fresh analysis on March 27, popular Twitter account IncomeSharks flagged on-balance volume (OBV) as a telltale sign of decreasing momentum.

“Just hard to ignore the weak OBV at resistance, price at resistance, and the lack of demand at these prices,” it commented alongside a chart.

“If we drop we get a new wave of buying demand that should push us higher. Only way we go up from here is big news in the markets or another squeeze.”

BTC/USD annotated chart. Source: IncomeSharks/ Twitter

Trader and analyst Rekt Capital agreed that a retracement would be “healthy” for Bitcoin should it enter.

“If BTC continues to struggle to break beyond $28,700 then a healthy dip may need to occur to gain fresh buyer interest at lower levels,” he tweeted on the day.

“Technicals are showing some short-term weakness & it could be that a catalyst will soon appear to play that weakness out.”

Over the weekend, Rekt Capital had flagged that price point as a critical area to watch while remaining upbeat about the longer-term trend.

BTC/USD, he forecast, will “confirm” a breakout from its bear market at the end of March, provided the monthly close preserves the 200-week moving average (WMA) as support.

The 200WMA currently stands at around $25,500, giving bulls room for a modest dip.

Similarly level-headed, but on shorter timeframes, is trader Crypto Tony, who eyed $27,700 and $26,600 to hold on the day.

“We have yet to lose the EQ at $27,700 on a 4 hour time frame, so the doomsday tweets can take a break,” he summarized, referring to the point in a range where buy and sell pressure is balanced.

“The range low at $26,600 is what we need to lose to begin a short hedge position for myself.”

BTC/USD annotated chart. Source: Crypto Tony/ Twitter

PCE data in focus as SVB gets bought out

Unlike last week, the final days of March are not slated to deliver surprises from the U.S. macroeconomic realm.

That is not to say that a curveball will not appear, but the rest of the month is comparatively quiet in terms of macro data releases.

The one key exception could be the March 31 release of the Personal Consumption Expenditures Index (PCE), which holds crucial insights into U.S. inflation trends.

“US PCE inflation numbers are due this week – last month this data caused a volatile move lower in risk,” markets commentator Tedtalksmacro commented.

“However, this month core PCE is expected to cool to +4.4% YoY down from +4.7% previous. That would be risk positive.”

Should Bitcoin react to PCE data that comes in outside expectations, the results could make for a volatile weekend just a day before the monthly close.

Any new developments in the ongoing banking crisis would add uncertainty into the mix, and the risk is there — contagion remains in Europe, while the defunct Silicon Valley Bank (SVB) found a buyer overnight.

Having hiked interest rates despite the crisis, the Fed is on a diverging path when it comes to interest rates, and further hikes could come, it says. In contrast, markets hold the opposite opinion due to the stress already induced by prior rate increases.

“Much tighter financial conditions and ongoing signs of bank stress are major reasons why the market thinks the Fed will be forced to abandon their plans,” analysis platform Mosaic Asset explained in the latest edition of its updates series, “The Market Mosaic,” on March 26.

Related: Crypto winter can take a toll on hodlers’ mental health

Mosaic further warned that historically, risk assets performed worse immediately following news of a rate hike policy pivot.

“If the Fed does pause the rate hiking campaign, it will signal growing concerns that the central bank is breaking something in the capital markets. But also consider that the Fed has a track record of adjusting policy only when it’s too late,” it continued.

It added that “as a result, in past bear markets the steepest stock market declines happened after the Fed pivots to a pause or outright rate cuts.”

BTC hodlers setting up supply shock

Bitcoin hodlers are setting new records under current conditions and laying the foundations for a supply shock in the process.

The latest data from on-chain analytics firm Glassnode shows that the amount of the available BTC supply, which has not left its wallet in two years or longer, is now at all-time highs.

As of March 27, more than 52.5% of all mined BTC has stayed dormant since at least March 2021, with owners not selling or transferring during the ensuing bear market.

Bitcoin dormant 2+ years chart. Source: Glassnode/ Twitter

Address numbers are also in “up only mode,” with the number of wallets holding 0.1 BTC or more setting new records on the day.

Likewise, wallets with a non-zero balance are more plentiful than ever, with 45,388,865 in existence as of March 27.

Bitcoin non-zero balance wallet chart. Source: Glassnode/ Twitter

The numbers feed into an existing narrative over what will happen to BTC price action during the next wave of mainstream consumer interest.

With so much of the supply now ferreted away into cold storage, any rush for BTC could spark the realization that one of the world’s hardest assets is already too scarce.

According to Glassnode, the overall BTC balance held by major exchanges remains near its lowest in five years.

Exchange BTC balance chart. Source: Glassnode

Bitcoin delivers perfect timing

For some, BTC price action is right on track for repeating past cycles, setting a new all-time high in the process.

Among them is Tedtalksmacro, who notes that the timing of the November multi-year lows on BTC/USD was more or less perfect.

Since then, a rally that began in January has stuck, and there have been no signs yet that fresh macro lows will appear to take out the $15,600 floor from November 2022.

“~390 days until the next BTC halving,” Tedtalksmacro wrote on March 27, referencing a dedicated thread about Bitcoin’s performance from the end of January.

BTC price is thus sticking to historical precedent by bottoming more than 400 days before its next block subsidy halving.

Tedtalksmacro, meanwhile, is not the only popular commentator taking halving cycle timing into account when it comes to price.

Earlier this month, Rekt Capital estimated that the next all-time high should be in around 18 months.

“It takes BTC around 900 days to rally from Downtrend breakout to Bull Market top,” he explained.

“If history repeats, $BTC will perform a Bull Market top in the Summer of 2025.”

BTC/USD annotated chart. Source: Rekt Capital/ Twitter

Crypto market sentiment stays greedy

As with last week, a potential thorn remains in the side of Bitcoin’s bull run, which comes from investors themselves.

Related: XRP, LTC, XMR and AVAX show bullish signs as Bitcoin battles to hold $28K

Despite the volatility over the Fed rate hike and inability to push closer to $30,000, Bitcoin has seen the kind of sentiment absent since its late 2021 all-time highs.

According to the Crypto Fear & Greed Index, “greed” presently characterizes market sentiment in crypto more broadly.

On March 21, the Index’s score hit 68/100, the most since November 2021, and has continued to circle the mid-60s since.

While not near “extreme” levels, the higher the Index rises into greed, the more likely a market correction will occur.

Crypto Fear & Greed Index (screenshot). Source: Alternative.me

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Custodia Bank’s membership denied for ties with crypto markets, says US Fed

The United States Federal Reserve released an 86-page report on March 24 detailing the reasons for denying Custodia Bank’s application for membership.

The United States Federal Reserve released an 86-page report on March 24 detailing the reasons for denying Custodia Bank’s application for membership in January, including the bank’s involvement in the crypto space. 

According to the report, the Fed’s board has raised “concerns about banks with business plans focused on a narrow sector of the economy”, with a high concentration of activities related to the crypto industry. The report notes:

“Those concerns are further elevated with respect to Custodia because it is an uninsured depository institution seeking to focus almost exclusively on offering products and services related to the crypto-asset sector, which presents heightened illicit finance and safety and soundness risks.”

The document also states that Fed’s members must align their risk management systems and controls with the activities described in their business plans. Based on the Fed’s purview, “Custodia had not yet developed a sufficient risk-management framework for its proposed cryptoasset-related activities, nor had it addressed the highly correlated risks associated with its undiversified business model.” 

If accepted as a member of the System, Custodia bank would be further forbidden to run crypto-related services “given the speculative and volatile nature of the crypto-asset ecosystem” that is not consistent with the purposes of the Federal Reserve Act.” The report states:

“Further, if the Board were to approve Custodia’s membership application, it would prohibit Custodia from engaging in a number of the novel and unprecedented activities it proposes to conduct—at least until such time as the activities conducted as principal are permissible for national banks […].”

In response to the report, Custodia Bank’s spokesperson Nathan Miller told Cointelegraph the “recently released Fed order is the result of numerous procedural abnormalities, factual inaccuracies that the Fed refused to correct, and general bias against digital assets.”

Miller also noted that the decision is a demonstration of the Fed’s “shortsightedness and inability to adapt to changing markets.” Miller further said that “perhaps more attention to areas of real risk would have prevented the bank closures that Custodia was created to avoid. It is a shame that Custodia must turn to the courts to vindicate its rights and compel the Fed to comply with the law.” 

The Fed’s report is 14x longer than its previous longest denial order, and 41% longer than the Fed’s longest order on any subject, the bank claims. In late January, the Fed denied a membership request from Custodia Bank, as well as a second application in February, claiming that its application “was inconsistent with the required factors under the law.” 

Update (on March 25, at 4:44 pm UTC): This article has been updated to include Custodia Bank’s response.