Decentral Block Post

The price of Bitcoin (BTC) surpassed $28,000 on March 21, but according to two derivatives metrics, traders aren't very ecstatic after a 36% gain in eight days. Looking beyond Bitcoin’s stellar performance, there are reasons why investors are not fully confident in further price upside The recent rescue of Credit Suisse, a 167-year-old leading Swiss financial institution, is proof that the current global banking crisis might not be over.

On March 19, Swiss authorities announced that UBS had agreed to acquire rival Credit Suisse in an "emergency rescue" merger in order to avoid further market-shaking turmoil in the global banking sector. The transaction could benefit from more than $280 billion in state and central bank support, which is equivalent to one-third of Switzerland's GDP. Unfortunately, there is no way to portray this agreement as reassuring or as a sign of strength from financial institutions, including central banks.

The same can be said for the emergency credit lifeline provided by the U.S. Treasury to protect the banking sector and increase FDIC reserves. The "Bank Term Funding Program" (BTFP) launched on March 12 marked a return to Fed liquidity injections, reversing the trend initiated in June 2022, when the Federal Reserve began monthly asset sales.

The global banking crisis prompted the Federal Reserve to abandon its inflation-control policies

By lending $300 billion in emergency funds to banks, the Fed completely reversed its strategy to curb inflation, which has been above 5% year-over-year since June 2021, whereas the target is 2%. This strategy, known as tightening, included increasing interest rates and reducing the $4.8 trillion in assets the Federal Reserve accumulated from March 2020 to April 2022.

On March 20,First Republic Bank (FRB) saw its credit ratings downgraded further into junk status by S&P Global, adding to the stress in the United States' regional banks. According to the risk agency, the lender's recent $30 billion deposit infusion from 11 large banks may not be enough to solve the FRB's liquidity problems.

The takeover of the ailing Credit Suisse bank by UBS boosted European equity markets on March 20 but not everyone is happy with the deal. According to Swiss regulator FINMA, the value of additional tier one (AT1) bonds will be written to zero. This move will wipe out $17 billion worth of investments for AT1 bond investors.

Among the turmoil in the global banking sector, Bitcoin (BTC) has shone brightly. That is because traders seem to have shifted their focus to the alternative available to the legacy banking system. Another thing working in favor of Bitcoin is that it has decoupled from the United States equities markets and is behaving as an uncorrelated asset class.

Bitcoin’s solid rally in the past few days has boosted trader sentiment. The Crypto Fear and Greed Index has soared into the greed zone with a score of 66/100. The next trigger for the markets is the rate hike decision by the Federal Reserve on March 22.

Could Bitcoin reach $30,000 and pull altcoins higher, or is a correction likely in the near term? Let’s study the charts to find out.

S&P 500 index price analysis

The S&P 500 index (SPX) rallied from 3,808 on March 13 and rose above the 200-day simple moving average (3,935) on March 16 but the bulls could not clear the hurdle at the 20-day exponential moving average (3,962).