Bitcoin Approaches $30K, Reaching Highest Price Since June
The roots of an hour-long surge were difficult to pinpoint, according to one analyst, but investors have recently been more optimistic about the crypto’s prospects following last month’s banking crisis.
Apr 10, 2023 at 9:56 p.m. UTC
/arc-photo-coindesk/arc2-prod/public/LXF2COBSKBCNHNRE3WTK2BZ7GE.png)
For a while Monday, even as large parts of the world were off work celebrating Easter Monday, bitcoin (BTC) seemed headed for a promised land above $30,000.
The largest cryptocurrency by market capitalization, which just three weeks ago had teased a run toward this threshold, topped $29,744 in the afternoon, its highest level since early June, amid a surge in investor optimism. But the cause of the move was difficult to pinpoint. It was currently trading at $29,616.
From about 10 a.m to 11 a.m. ET (14:00-15:00 UTC), bitcoin rose nearly 4%. It had been lingering closer to $28,000 since mid-March, when fears about the conventional banking system began to diminish.
“There isn't a clear catalyst for this spike,” Edward Moya, senior market analyst for foreign exchange market maker Oanda, wrote in an email to CoinDesk, although he said that the surge might stem partly from “buying from crypto traders voicing frustration on social media over a one-sided New York Times article that took issue over [bitcoin's] energy consumption.”
Moya also noted that the move higher “occurred around the release of news that Federal Home Loan Bank debt issuance had lessened, signaling that “the banking crisis was easing.”
Ether (ETH) also jumped, crossing the $1,900 level before retreating. It was recently up about 1.7% versus 24 hours earlier. Other major cryptos were largely in the green, albeit light shades. ARB, the token of layer 2 blockchain Arbitrum, was recently up more than 2.8%, while XRP rose about 1%. The CoinDesk Market Index, a measure of the crypto market's overall performance, recently rose 2.3%.
Equity indexes closed roughly flat with the S&P 500 and Dow Jones Industrial Average rising a few ticks of a percentage point, and the tech-heavy Nasdaq Composite losing 0.03%. Crypto-related stocks enjoyed a memorable day with crypto exchange Coinbase (COIN) and corporate bitcoin vault MicroStrategy (MSTR) both rising more than 7.5%.
Markets will be eyeing the March Consumer Price March Index (CPI) report this week for signs that inflation is continuing its recent trudge downward.
In February, inflation in the U.S. slowed to 0.4% from 0.5% a month earlier and 6% on a yearly basis from 6.4% the previous month. Bitcoin jumped past $26,000 following that report, on March 14.
A continued slowdown could embolden central bankers to scale back their year-long regime of harsh interest rate hikes, although the impact on bitcoin is uncertain. The crypto seemed to gain momentum following the recent U.S. bank failures that caused worries about the conventional financial system, as investors shifted toward assets that retain value through good times and bad.
Investors will also be weighing the first wave of quarterly earnings with banking giants JPMorgan Chase, Wells Fargo and Citigroup scheduled to report results. Analysts are expecting a largely downcast quarter, particularly in the hard-hit financial services sector.
“BTC is also being seen as a reliable store of value that lacks the issues that come with storing your money by way of a third-party intermediary, or a bank,” Richard Mico, the U.S. CEO and chief legal officer of Banxa, a payment-and-compliance infrastructure provider to the crypto industry, wrote in an email to CoinDesk. “This is further supported by the decreasing correlation with the equity markets since 2021 – BTC is now properly starting to be perceived as a risk-off asset.”
Joe DiPasquale, the CEO of crypto fund manager BitBull Capital, was cautiously optimistic about the sustainability of bitcoin’s Monday surge.
“Bitcoin is likely to find resistance at $30,000,” DiPasquale noted in an email to CoinDesk. From a technical-analysis perspective, the current move is “a retest of the range high established in March after the initial surge from under $20,000. Success of this test would see the price claiming $30,000 while a failure here should see BTC drop to $25,000, followed by $23,000.”
But he added: “The current price is also testing the lows of July 2021, where the market bounced back into another big rally.”
UPDATE (April 10, 2023, 22:27 UTC): Updates with bitcoin's most recent prices.
:format(webp)/s3.amazonaws.com/arc-authors/coindesk/fef307fe-e7ed-4f5a-badc-d7a5744bbd1e.png)
James Rubin was CoinDesk's U.S. news editor based on the West Coast.