First Mover Asia: Bitcoin Breaks Its Losing Streak in Late Tuesday Rally

Good morning. Here’s what’s happening:Prices: A late surge returned bitcoin to its previous perch above $28K. Ether also rallied.Insights: Is crypto on the mend? What will happen on the regulatory front? CoinDesk’s annual Consensus conference features crypto industry leaders and will cover key topics over three days.PricesBitcoin Surges, but Will the Rally Continue?

After five days lingering below $28,000, bitcoin went for a surprising ride upward and took much of the rest of the market with it.

The largest cryptocurrency by market capitalization was recently trading above $28,300, up about 3.7% over the past 24 hours. The origins of the surge were difficult to pinpoint. BTC began ticking upward less than 24 hours after embattled First Republic Bank noted that it had lost $100 billion in deposits during its first quarter earnings presentation on Monday, reviving concerns about the banking sector’s stability. Last month, cryptos rose amid a rash of U.S. regional banking implosions as investors sought refuge in assets that hold their value.

«With First Republic Bank looking like it could go under, I suspect the market is anticipating yet more liquidity injections to prop up what certainly seems to be an American banking sector that is still very much in the throes of crisis,» Jake Boyle, director of Caleb & Brown, a retail crypto brokerage, wrote in an email to CoinDesk. «Bitcoin, as a result, is front-running these expectations. Cracks in the financial system are growing, even if relatively subtly at the moment, and it’s going to be incredibly difficult for the Fed to adhere to its tightening regime going forward.»

Boyle added: «Bitcoin’s rally of late has more to do with liquidity injections and rising expectations that the Fed’s tightening will probably have to end fairly soon, or else even greater turbulence in the banking sector could ensue.”

Data from analytics firm Coinglass also showed that some $11.3 million of BTC short positions had been liquidated since 4 p.m. Short squeezes have historically tended to accelerate price jumps.

Ether was recently changing hands at about $1,870, up 1.8% from Monday, same time. Other major cryptos were largely in the green with SOL, the native token of the Solana blockchain, and ADA, the native crypto of the Cardano smart contracts platform, both recently rising more than 3%. The CoinDesk Market Index, a measure of the crypto market’s overall performance was up 2.6%.

In early Asia trading, the Nikkei and Hang Seng indexes were down slightly. U.S. stocks closed down with the tech-heavy Nasdaq Composite off nearly 2%.

In his weekday column, CoinDesk analyst Glenn Williams highlighted that at least two technical indicators were foreshadowing a bitcoin rebound. Williams noted that BTC’s «recent decline accompanied an expected drop in momentum, but it also occurred in conjunction with a move towards the lower end of the Bollinger Band. Bollinger Bands plot an asset’s 20-day moving average, and calculate two standard deviations above and below the average. An asset’s price is expected to stay within two standard deviations of the average 98% of the time, so a breach above or below is noteworthy.

Williams wrote that «bitcoin approaching the lower range of its Bollinger Bands raises questions about its near-term path, but he added that «given recent history, technical analysts could expect BTC prices to advance, albeit methodically, back to their 20-day average.»

Biggest Gainers

Asset Ticker Returns DACS Sector Avalanche AVAX +4.4% Smart Contract Platform Cardano

Source