Home Bitcoin trades above supports, bank collapses are a good omen

Bitcoin trades above supports, bank collapses are a good omen

Bitcoin (BTC) is nearing a potentially pivotal moment as its average price across three different time frames has converged within a narrow range, hinting at a possible breakout.

Jamie Coutts — Real Vision’s chief crypto analyst — noted in a June 4 X post that Bitcoin’s simple moving average (SMA) across the five-day, 30-day, and 50-day periods had all fallen between $65,000 and $68,239. This convergence, following a period of steady price action since March, suggests low volatility and raises expectations for a potential price surge, although a retrace is also possible.

Currently, Bitcoin is trading above the three SMAs at $70,840, according to CoinMarketCap data, and is considered a “Strong buy” by TradingView’s moving average indicator. Trading above the moving average is a positive sign, indicating that the moving average could act as a new support level if the price drops.

On June 4, Bitcoin briefly touched $71,040 before quickly retracing, a key price level that traders are monitoring as the next step toward reaching its all-time high of $73,679. Over the past 30 days, Bitcoin has maintained its crucial support level of $60,000 and has gained 11.93%.

Market uncertainty

Despite the uncertainty surrounding the breakout direction, Coutts highlighted the significant increase in the number of U.S. banks “on the brink of collapse” during the first quarter of 2024. The Federal Deposit Insurance Corporation (FDIC) reported a 21% jump in the number of banks on the “Problem Bank List” in Q1 2024, reaching 63 banks.

This comes after the collapse of three banks in March 2023 — Signature Bank, Silvergate Bank, and Silicon Valley Bank — which triggered a 35% rise in Bitcoin’s price over nine days to $27,050. Coutts suggested that the market may soon see a fresh capital injection, which could drive Bitcoin’s price higher:

Can you smell that, son? That’s the smell of central bank liquidity in the air…

These comments echo Jamie Dimon, longtime CEO of JPMorgan Chase, recently voicing concerns that the collapse of Silicon Valley Bank will have long-term economic consequences.

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Radek Zielinski
Tech Journalist

Radek Zielinski is an experienced technology and financial journalist with a passion for cybersecurity and futurology.

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