Benefiting from the soaring U.S. technology stocks and the resurgence of doubts about the collapse of the First Republic Bank, Bitcoin resumed its offensive in the early morning of this (26th), breaking through the $28,000 mark in one fell swoop.
At press time, Bitcoin was trading at $28,364.52, up 3.5% over the past 24 hours. Bitcoin traded sideways for almost all of yesterday (25) days around $27,300 before starting to surge higher shortly after the U.S. stock market closed.
About $11.3 million in short Bitcoin positions have been liquidated since 4 a.m. today, according to Coinglass. According to the past experience of the market, whenever this kind of “short squeeze” situation occurs, it will often accelerate the rise of currency prices.
Although it is still uncertain whether Bitcoin can stand at the $28,000 mark, the re-emergence of the “banking crisis theme” has set off investors’ imaginations about the future of Bitcoin.
In the past few months, many traditional banks have been struggling with insufficient liquidity and insolvency, and Bitcoin has unexpectedly become the main beneficiary of the banking crisis. In early March, widespread bank runs at Silicon Valley Bank and other banks spurred a more than 40% rally in bitcoin in just a few days.
Now, as First Republic Bank announced that it lost 100 billion U.S. dollars in deposits in March, it is considering selling assets to save itself, and then news that it will be taken over by the government has once again triggered market concerns about the banking industry, causing stock prices to plummet 50%, while Bitcoin soared at the same time.
Some voices in the market believe that the reason for Bitcoin’s strong performance is justified, because it has all the attributes of a safe haven and a store of value, and more and more investors have begun to turn to Bitcoin as a hedge against the instability of the financial system. Hedging tools, these excellent characteristics will continue to push up the price of Bitcoin.
