BTC Bulls to Target $23,000 on Silicon Valley Bank News

Key Insights:

• It was a bullish Sunday session, with BTC surging by 7.57% to end the day at $22,083.
• US regulators delivered a breakout session, with the Silicon Valley Bank depositors able to withdraw all deposits from today.
• Technical indicators turned bullish, with sub-$23,000 in view.

On Sunday, bitcoin (BTC) surged by 7.57%. Following a 1.62% gain on Saturday, BTC ended the day at $22,083. Significantly, BTC returned to the $22,000 handle for the first time since March 8.

After a range-bound morning, BTC fell to a mid-afternoon low of $20,357. Steering clear of the First Major Support Level (S1) at $19,998, BTC surged to a final-hour high of $22,193. BTC broke through the First Major Resistance Level (R1) at $20,924 and the Second Major Resistance Level (R2) at $21,320 to end the day at $22,083.

US Regulators Deliver a Broad-Based Crypto Rally

On Sunday, Silicon Valley Bank remained the market focal point. During the afternoon session, US regulators announced that all customers would have access to their deposits from Monday.

Significantly, the Federal Reserve created a new Bank Term Funding Program to offer loans with a maturity of one year to depository institutions. Institutions would pledge Treasuries and other held assets as security.

On Sunday, regulators closed down Signature Bank, which faced a similar problem, with regulators protecting all depositors.

USD Coin (USDC) also provided support, with the re-peg in process. On Saturday, Circle issued an update on USDC and Silicon Valley Bank, saying,

“It is possible that SVB may not return 100% and that any return might take some time, as the FDIC issues IOUs (i.e., receivership certificates) and advanced dividends to deposit holders.”

The SVB statement went on to say,

“In such a case, Circle, as required by law under stored-value money transmission regulation, will stand behind USDC and cover any shortfall using corporate resources, involving external capital if necessary.”

Following the Sunday news on Silicon Valley Bank, Circle no longer needs to worry about addressing the $3.3 billion shortfall.

This morning, USDC was up 2.72% to $0.9928.

The Day Ahead

We expect further market reaction to the news of US regulators saving Silicon Valley Bank depositors and addressing SVB contagion.

However, the markets should continue to monitor Binance and FTX news and updates from the ongoing SEC v Ripple case.

There are no US economic indicators to influence today, leaving the NASDAQ Composite Index to guide investors ahead of the US CPI Report on Tuesday.

In response to the Silicon Valley Bank news, the NASDAQ mini was up 133.25 points this morning.

Bitcoin (BTC) Price Action

This morning, BTC was up 1.51% to $22,417. A bullish start to the day saw BTC rise to an early high of $22,698 before easing back.

BTC Technical Indicators

BTC needs to avoid the $21,544 pivot to retarget the First Major Resistance Level (R1) at $22,732. A move through the morning high of $22,698 would signal an extended bullish session. The crypto news wires should be crypto-friendly to support an extended rally.

In the event of an extended rally, BTC would likely test the Second Major Resistance Level (R2) at $23,380. The Third Major Resistance Level (R3) sits at $25,216.

A fall through the pivot would bring the First Major Support Level (S1) at $20,896 into play. However, barring a crypto event-fueled sell-off, BTC should avoid sub-$20,000 and the Second Major Support Level (S2) at $19,708.

The Third Major Support Level (S3) sits at $17,872.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bullish signal. BTC sat above the 200-day EMA ($22,322). The 50-day EMA narrowed to the 200-day EMA, with the 100-day EMA closing in on the 200-day EMA, delivering bullish signals.

A hold above the 200-day EMA ($22,322) would support a breakout from R1 ($22,732) to give the bulls a run at R2 ($23,380). However, a fall through the 200-day ($22,322) and 100-day ($22,014) EMAs would bring the 50-day EMA ($21,384) into view. A fall through the 50-day EMA would send a bearish signal.