BTC and ETH Market Analysis: What Happened Over The Weekend?

Cryptocurrency prices reversed course on Monday from their recent downturn as regulators made moves to contain what appeared to be a widening bank crisis. In addition, comments from the Federal Reserve have dispersed investor fears about the impact of the collapsing banks on the banking sector and economy. Bitcoin, Ethereum, and all major cryptocurrencies saw a spike in their prices on Monday, and they are still rallying as of early Wednesday.

Last week, state regulators shuttered Signature Bank on Sunday, which has roughly 30% of its deposit from cryptocurrency customers. In addition, we also saw the collapse of Silicon Valley Bank, whose depositor base mainly consists of startups and VC funds. This resulted in the price of BTC falling below $20,000 and ETH falling below $1,400 in the cryptocurrency market, as the market was filled with fear of contagion.

Later that day, the U.S. Treasury Department, Federal Reserve, and Federal Deposit Insurance Corporation (FDIC) assured Silicon Valley Bank and Signature Bank depositors that they would have full access to their deposits by Monday morning. In addition, the regulators mentioned that the U.S. government’s bank-deposit insurance fund would cover all deposits instead of the standard $250,000. Furthermore, they promised to launch a new Bank Term Funding Program worth $25 billion to offer short-term loans to banks. These loans would be backed by collaterals such as U.S. Treasury securities and mortgage-backed securities.

This regulatory intervention helped diminish depositor panic, boosting BTC and ETH prices by as much as 15% and 10%, respectively.

Bitcoin Price Analysis

On Monday, Bitcoin’s price recovered above $24,000 for the first time since February 23. And it leaped another 14% Tuesday morning to briefly reach a new yearly high of $26,533. BTC is currently trading around $25,000 as it works on its fifth consecutive day of gains. So far this year, the world’s most prominent cryptocurrency is up over 50%. If BTC continues to rise, we can expect the next resistance at around $28,700, but if it closes below $24,000, it could lead to a fall toward $21,000.

Currently, BTC is following a perfect stock-to-flow (S2F) trajectory, which suggests that the asset is on track to reach $100,000 in the near future. The S2F model considers the current supply of BTC and the rate at which new BTC is being mined. The model then uses this information to calculate the asset’s scarcity, expressed as a current supply ratio to the annual production rate.

Ethereum Price Analysis

After jumping 13% on Monday the 13th, ETH then climbed by another 7% early Tuesday. Whilst Ethereum, the leading smart contract blockchain traded below $1,370 on Friday of last week, it has since managed to reclaim its $1,700 level for the first time since February 20th. On March 14th, Ethereum’s price rallied to a high of $1,779, liquidating an extensive share of the shorts. Ethereum is currently trading around $1,700 and is working on its fifth consecutive day of gains. Similar to Bitcoin, Ethereum is up around 50% so far this year.

In the present scenario, and taking into account the key Shanghai update, Ethereum could rise to $1,720 – the recent resistance level, by the end of March. Otherwise, the price can return back to around $1,500 after the hype subsides.

Crypto Trading Volume and The Outlook

During the latest bull run, both BTC and Ethereum showed an enormous potential of being the new safe haven when conventional economy faults. This is also confirmed by the cryptocurrency market capitalization, which managed to grow from $900 billion to $1.1 trillion in a matter of days. The funds are flocking in and bulls are happy. With it, also grew the 24-hour trading volume, peaking on the leading crypto exchanges like Gate.io to a wholesome $2.5 billion.

Given the limited supply of BTC and the constantly evolving world of Ethereum, analysts predict 2023 to be a good year for crypto. It seems that we are finally past the crypto winter, and the market sentiment is back to where it should be – a complete belief in blockchain technology and the perks that it brings to the traditional world of finance and the global economy.

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