crypto market is up today as Bitcoin and altcoins react to $300 billion liquidity from the Federal Reserve — move being labeled new quantitative easing (QE).
The crypto market is up today as the impact of the ongoing United States banking crisis plays out — the Federal Reserve has injected $300 billion into the economy.
Data from Cointelegraph Markets Pro and TradingView shows Bitcoin
BTCup 7%, Ether 4.5% and Binance Coin 5.7% in 24 hours.
A broad rally in crypto markets means Bitcoin is back challenging the week's highs, which also marked its best performance since June 2022. Can bulls sustain the momentum?
Nerves are palpable everywhere as the latest economic data shows the extent to which the Fed has gone to contain a banking crisis which some argue is unlike any other.
Amid warnings that more banks could fail in the coming weeks and contagion spreading to Europe, it appears that crypto is one of the few safe havens from the kind of turmoil reminiscent of the Global Financial Crisis (GFC) of 2008.
Cointelegraph takes a look at the major reasons why the crypto market is up today.
Fed liquidity pump boosts crypto amid claims QE is back
"It's the liquidity, stupid!" popular markets commentator Holger Zschaepitz summarizes on the day as data showed the true extent of the Fed's latest cash injections.
The combined implosion of Silicon Valley Bank (SVB) and Signature Bank has resulted in the Fed providing an emergency $297 billion — growing its balance sheet for the first time since it began to raise interest rates.
Its latest discount window borrowing has further seen banks take $150 billion, which makes for a new record even topping the 2008 GFC.
Unsurprisingly, reactions are heralding the end of quantitative tightening (QT) — the process of removing liquidity from the economy — and a return to its opposite, quantitative easing (QE).
Such a policy was enacted previously by the Fed after the GFC, as well as in March 2020 during the COVID-19 cross-market crash. The years that followed saw the U.S. M2 money supply grow 46% before QT began — and Bitcoin went from under $4,000 to nearly $70,000.
Bitcoin leads crypto to multi-month high retest
Bitcoin price volatility may still be rampant, but the message from crypto is increasingly clear — bulls are determined to ditch the past eighteen months' downtrend.
BTC/USD is trading at over $27000 at the time of writing, eyeing up a retest of its nine-month highs from earlier in the week.
Commenting on the latest events, popular trader Crypto Tony remained modest in his outlook amid a still-reactionary Bitcoin trading profile.
Trader and analyst Josh Rager meanwhile eyed what could be a significant resistance/support flip for Bitcoin on weekly timeframes — fueling potential continuation. This comes in the form of the 200-week exponential moving average (EMA).
"Even with the lower time frames chopping around, the daily for BTC looks good and showing strength," he tweeted on March 15.
