Bitcoin rises 30% on the week as global banks retreat

After breaking through the $28,000 mark on Sunday, Bitcoin (BTC) hit a year high of $28,503 on Monday morning before a slight correction to $28,375 at the time of writing, according to data from CoinGecko.

The latest price action means the leading cryptocurrency is up 4% on the day, and a whopping 28.4% over the past week, making it one of the top performers in the market.

Bitcoin last changed hands at these levels last June amid the collapse of the Terra ecosystem and the contagion that began to spread across the crypto industry to claim the scalps of several key players, such as Celsius Network and Three Arrows Capital, among others.

The latest rally also means that the price of Bitcoin is up around 70% since the start of the year.

Global banks in turmoil

Bitcoin’s impressive performance is a stark contrast to major banking stocks that have continued to plunge following the collapse of Silicon Valley Bank and Signature Bank earlier this month.

There was further pressure on the global banking sector after Sunday’s announcement that Swiss banking giant UBS agreed to buy its troubled rival Credit Suisse in an emergency deal worth more than $3 billion.

Several major central banks, including the Federal Reserve, the Bank of England and the European Central Bank, also came together on Sunday to announce “coordinated action” to boost liquidity in their standing US dollar swap arrangements.

The aim is to facilitate access to liquidity in US dollars in times of crisis. Still, Credit Suisse’s stock plunged nearly 60% in morning trading on Monday, while UBS was down 7%.

New price targets for Bitcoin

Amid the banking chaos, Bitcoin has soared, prompting enthusiasts to once again promote the leading cryptocurrency as a “safe haven.”

Commenting on the collapse of SVB and Signature Bank, Cathie Wood of Ark Invest said last week that “this debacle would not have been possible in the decentralized, transparent, auditable and over-secured crypto-asset ecosystem.”

“During the last week, crypto assets behaved as safe havens: along with gold, prices appreciated,” she said.

Matrixport’s head of research Markus Thielen, meanwhile, has said that the firm is reassessing its price targets for the leading cryptocurrency.

“We are adjusting our short-term price target as our previous target of 28,000 has been reached. The new Bitcoin price target is 36,000 by summer 2023,” Thielen wrote in the latest note.

Thielen added that the $45,000 goal by the end of the year “looks pretty plausible now.”

The Matrixport researcher also noted that while both Bitcoin and Ethereum trading above the 50-day moving average, which is “bullish”, Ethereum is underperforming Bitcoin with the ETH-to-BTC ratio on the decline.

“Crypto is driven by beta factors and a macro liquidity story is developing that historically has been very powerful for Bitcoin,” Thielen said.

Ethereum, the second-largest cryptocurrency, has fallen slightly on the day, but was still up 13% on the week, changing hands just below $1,800 by press time.

The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment or other advice.