Experts Predict More Bank Failures in the US Following Interest Rate Hike and Unsettled Banking Crisis

March 27, 2023 Bitcoin.com

Crypto market rally stalls at the $1.2T level, but bulls are getting positioned

March 27, 2023 Coin Telegraph

Crypto market rally stalls at the .2T level, but bulls are getting positioned

The total crypto market cap has stalled at the $1.2 trillion level, but derivatives data shows bulls are preparing for the next breakout.

After gaining 11% between March 16 and March 18, the total crypto market capitalization has been battling resistance at the $1.2 trillion level. This same level was reached on August 14, 2022 and was followed by a 19.7% decline to $960 billion over the next two weeks. During the lateralization period between March 20 and March 27, Bitcoin (BTC) gained 0.3%, while Ether (ETH) posted modest gains of 1.6%.

*Total crypto market cap in USD, 12-hour. Source: TradingView*

One source of favorable short-term momentum is a change in the Federal Reserve’s monetary policy The U.S. Federal Reserve was forced to increase its balance sheet by $393 billion between March 9 and March 23 in order to provide short-term loans to failing banks. The objective of the plan was to reduce inflation, which has significantly impacted the cost of living and ultimately hampered economic expansion in the United States.

The balance sheet reduction runs counter to the central bank's previous nine-month trend of offloading some of its debt instruments, exchange-traded funds and mortgage-backed securities. The reversion of this strategy is initially bullish for risk assets because the Fed is acting as a lifeline for struggling banks and hedge funds.

On the other hand, the sector's regulatory risks were exacerbated on March 22 when Coinbase received a Wells notice from the U.S. Securities and Exchange Commission. The exchange's staking program, some of its digital asset listings, and wallet services could all be targeted by the regulator. Again, the uncertainty stems from not knowing which assets qualify as securities.

These competing forces may have been the primary reason for cryptocurrencies' narrow trading range near $1.18 trillion between March 17 and March 27. However, derivatives data presents compelling arguments for a rally toward $1.35 trillion and a retest of the $1 trillion threshold.

The total crypto market capitalization has remained stable since March 20, with XRP rallying by 22% and Litecoin (LTC) gaining 17%. XRP's gains are likely attributable to investors' expectations that Ripple will prevail in its ongoing legal battle against the SEC. As for Litecoin, analysts point to its upcoming halving in August, when the rewards for mining new blocks will be cut in half.

Options traders are reasonably confident above $1 trillion

Traders can gauge the market's sentiment by measuring whether more activity is going through call (buy) options or put (sell) options. Generally speaking, call options are used for bullish strategies, whereas put options are for bearish ones.

A put-to-call ratio of 0.70 indicates that put option open interest lags behind the greater number of call options. In contrast, a 1.40 indicator favors put options, which is a bearish sign.

*BTC options volume put-to-call ratio. Source: Laevitas*

Since March 10, Bitcoin's put-to-call ratio has been either balanced or favoring neutral-to-bullish call options. Even though Bitcoin's price has risen by 41% in the past two weeks, options traders indicate they are not increasingly concerned about a price correction.

Leverage demand is balanced despite the resistance at $1.2 trillion

Perpetual contracts, also known as inverse swaps, have an embedded rate that is usually charged every eight hours. Exchanges use this fee to avoid exchange risk imbalances.

A positive funding rate indicates that longs (buyers) demand more leverage. However, the opposite situation occurs when shorts (sellers) require additional leverage, causing the funding rate to turn negative.

*Perpetual futures accumulated 7-day funding rate on March 27. Source: Coinglass*

In the past week, the seven-day funding rate for the majority of the leading cryptocurrencies has been neutral, indicating that no excessive buying leverage has been used to support prices. This translates to firepower for bulls, if necessary, and a significant reduction in liquidation risks.

The only exception was BNB, where short sellers paid 1.25% per week to maintain their positions. Regulatory uncertainty surrounding Binance exchange is likely behind whales' interest in shorting BNB.

The recent rally appears sustainable from a derivative perspective and bulls are well positioned to defend against future declines. However, given that the crypto price gains may have been fueled by the Fed's emergency action to avoid a banking crisis, the odds favor further lateral price movement.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Will BTC ditch the bear market? 5 things to know in Bitcoin this week

March 27, 2023 Coin Telegraph

Bitcoin

Bitcoin price is gearing up for a key monthly close that could see it dump its 2022 bear market for good.

Bitcoin (BTC) enters the last week of March in uncertain territory as a strong weekly close still keeps $30,000 out of reach.

The largest cryptocurrency has sealed seven days of practically flat performance despite some volatility in between as the market seeks fresh direction. Where could it go next?

In what was a week of more surprises from the macro economy, BTC/USD spent much time reacting to decisions from the United States Federal Reserve and associated commentary.

Next up, however, is a period of relative calm, followed by a key monthly close, which analysis says could see the start of a new bullish trend.

Bitcoin is currently up 20% for March so far, meaning that the coming days will decide the strength of the ongoing recovery from multi-year lows.

Cointelegraph takes a look at five key topics to bear in mind during the final week of a what has been a volatile month.

Countdown to Bitcoin price monthly close

Bitcoin managed to close out the week with a modest flourish, returning to the $28,000 mark, data from Cointelegraph Markets Pro and TradingView shows.

*BTC/USD 1-week candle chart (Binance). Source: TradingView*

This meant that BTC/USD stayed practically unmoved versus the weekend prior, delivering some impressive stability despite the periods of volatility, which occurred in the intervening period.

Nonetheless, concerns are brewing that the market may struggle to preserve current levels.

In fresh analysis on March 27, popular Twitter account IncomeSharks flagged on-balance volume (OBV) as a telltale sign of decreasing momentum.

“Just hard to ignore the weak OBV at resistance, price at resistance, and the lack of demand at these prices,” it commented alongside a chart.

“If we drop we get a new wave of buying demand that should push us higher. Only way we go up from here is big news in the markets or another squeeze.”

*BTC/USD annotated chart. Source: IncomeSharks/ Twitter*

Trader and analyst Rekt Capital agreed that a retracement would be “healthy” for Bitcoin should it enter.

“If BTC continues to struggle to break beyond $28,700 then a healthy dip may need to occur to gain fresh buyer interest at lower levels,” he tweeted on the day.

“Technicals are showing some short-term weakness & it could be that a catalyst will soon appear to play that weakness out.”

Over the weekend, Rekt Capital had flagged that price point as a key area to watch, while remaining upbeat about the longer-term trend.

BTC/USD, he forecast, will “confirm” a breakout from its bear market at the end of March, provided the monthly close preserves the 200-week moving average (WMA) as support.

The 200WMA currently stands at around $25,500, giving bulls room for a modest dip.

#BTC has broken back above the 200-week MA

However, it hasn't technically been reclaimed as support

If $BTC were to soon dip, price could try to retest the 200-week MA as support

Successful retest there would fully confirm the breakout beyond the 200-week MA#Crypto #Bitcoin https://t.co/RqdxRuAkwd pic.twitter.com/zdYjOHxwCE
— Rekt Capital (@rektcapital) March 26, 2023

Similarly level-headed, but on shorter timeframes, is trader Crypto Tony, who on the day eyed $27,700 and $26,600 to hold.

“We have yet to lose the EQ at $27,700 on a 4 hour time frame, so the doomsday tweets can take a break,” he summarized, referring to the point in a range where buy and sell pressure is balanced.

“The range low at $26,600 is what we need to lose to begin a short hedge position for myself.”

*BTC/USD annotated chart. Source: Crypto Tony/ Twitter*

PCE data in focus as SVB gets bought out

Unlike last week, the final days of March are not slated to deliver surprises from the U.S. macroeconomic realm.

That is not to say that a curveball will not appear, but in terms of macro data releases, the rest of the month is comparatively quiet.

Key macro economic events for the week ahead:

️ Thursday 30th (UTC)
12:30 — US Gross Domestic Product (GDP)
12:30 — US Unemployment Claims

• GDP expected at the same 2.7%
• Unemployment Claims expected at 196K from 191K

️ Friday 31st (UTC)
12:30 — US PCE Core…
— Lambda (@lambdamarkets1) March 26, 2023

The one key exception could be the March 31 release of the Personal Consumption Expenditures Index (PCE), which holds key insights into U.S. inflation trends.

“US PCE inflation numbers are due this week - last month this data caused a volatile move lower in risk,” markets commentator Tedtalksmacro commented.

“However, this month core PCE is expected to cool to +4.4% YoY down from +4.7% previous. That would be risk positive.”

Should Bitcoin react to PCE data which comes in outside expectations, the results could make for a volatile weekend, coming just a day before the monthly close.

Any new developments in the ongoing banking crisis would add uncertainty into the mix, and the risk is there — contagion remains in Europe, while the defunct Silicon Valley Bank (SVB) found a buyer overnight.

JUST IN: First Citizens agrees to buy Silicon Valley Bank for $500 million.

Just one year ago, SVB was worth nearly $40 billion and operated as the 14th biggest bank in the U.S.

One month ago, First Citizens was half the size of SVB.

It’s concerning how quickly SVB collapsed.
— The Kobeissi Letter (@KobeissiLetter) March 27, 2023

Having hiked interest rates despite the crisis, however, the Fed is on a diverging path when it comes to interest rates — further hikes could come, it says, while markets hold the opposite opinion due to the stress already induced by prior rate increases.

“Much tighter financial conditions and ongoing signs of bank stress are major reasons why the market thinks the Fed will be forced to abandon their plans,” analysis platform Mosaic Asset explained in the latest edition of its updates series, “The Market Mosaic,” on March 26.

Mosaic further warned that historically, risk assets performed worse immediately following news of a rate hike policy pivot.

“If the Fed does pause the rate hiking campaign, it will signal growing concerns that the central bank is breaking something in the capital markets. But also consider that the Fed has a track record of adjusting policy only when it’s too late,” it continued.

It added that “as a result, in past bear markets the steepest stock market declines happened after the Fed pivots to a pause or outright rate cuts.”

BTC hodlers setting up supply shock

Bitcoin hodlers are setting new records under current conditions — and laying the foundations for a supply shock in the process.

The latest data from on-chain analytics firm Glassnode shows that the amount of the available BTC supply, which has not left its wallet in two years or longer, is now at all-time highs.

As of March 27, more 52.5% of all mined BTC has stayed dormant since at least March 2021, with owners not selling or transferring during the ensuing bear market.

*Bitcoin dormant 2+ years chart. Source: Glassnode/ Twitter*

Address numbers are also in “up only mode,” with the number of wallets holding 0.1 BTC or more setting new records on the day.

Wallets with a non-zero balance likewise are more plentiful than ever before, with 45,388,865 in existence as of March 27.

*Bitcoin non-zero balance wallet chart. Source: Glassnode/ Twitter*

The numbers feed into an existing narrative over what will happen to BTC price action during the next wave of mainstream consumer interest.

With so much of the supply now ferreted away into cold storage, any rush for BTC could spark the realization that one of the world’s hardest assets is already too scarce.

According to Glassnode, the overall BTC balance held by major exchanges remains near its lowest in five years.

*Exchange BTC balance chart. Source: Glassnode*

Bitcoin delivers perfect timing

For some, BTC price action is right on track for repeating past cycles — and setting a new all-time high in the process.

Among them is Tedtalksmacro, who notes that the timing of the November multi-year lows on BTC/USD was more or less perfect.

Since then, a rally which began in January has stuck, and there have been no signs as yet that fresh macro lows will appear to take out the $15,600 floor from November 2022.

“~390 days until the next BTC halving,” Tedtalksmacro wrote on March 27, referencing a dedicated thread about Bitcoin’s performance from the end of January.

~390 days until the next #BTC halving. https://t.co/cR4ILrC7A2
— tedtalksmacro (@tedtalksmacro) March 27, 2023

BTC price is thus sticking to historical precedent by bottoming more than 400 days before its next block subsidy halving.

Tedtalksmacro is meanwhile not the only popular commentator taking halving cycle timing into account when it comes to price.

Earlier this month, Rekt Capital estimated that the next all-time high should be in around 18 months’ time.

“It takes BTC around 900 days to rally from Downtrend breakout to Bull Market top,” he explained.

“If history repeats, $BTC will perform a Bull Market top in the Summer of 2025.”

*BTC/USD annotated chart. Source: Rekt Capital/ Twitter*

Crypto market sentiment stays greedy

As with last week, there remains a potential thorn in the side of Bitcoin’s bull run — and it comes from investors themselves.

Despite the volatility over the Fed rate hike and inability to push closer to $30,000, Bitcoin is seeing the kind of sentiment absent since its late 2021 all-time highs.

According to the Crypto Fear & Greed Index, “greed” is what characterizes market sentiment in crypto more broadly at present.

On March 21, the Index’s score hit 68/100, the most since November 2021, and has continued to circle the mid-60s since.

While not near “extreme” levels, the higher the Index rises into greed, the more likely a market correction is to take place.

*Crypto Fear & Greed Index (screenshot). Source: Alternative.me*

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

How does the economy work?

March 26, 2023 Coin Telegraph

Coin Telegraph

The economy is a system of producing and exchanging goods and services in a society.

The economy is a complex system of production, distribution, and consumption of goods and services. Understanding how the economy works can be challenging, but it is essential for making informed decisions about personal finance, investing and public policy.

This article will explore the fundamental concepts of how the economy works, including the factors that influence it and the various components that make up the economy.

Factors that influence the economy

The economy is a dynamic system that is constantly changing and evolving. It is a vast network of people, organizations and governments; each involved in creating, moving, and using commodities and services. The economy is influenced by a wide range of factors, including macroeconomic factors like government policies, interest rates and international trade, as well as microeconomic factors such as individual decisions about spending and saving.

Government policies

Through its policies, the government significantly impacts how the economy develops. Fiscal policy, for instance, describes how the government uses spending and taxation to affect the economy. The government can stimulate the economy or deflate an overheated one using its purchasing power. Taxation is another tool the government can employ to manage the money supply and affect the level of economic activity.

➡️ New: Legislature's personal income tax & corporate tax proposals would raise between $1.6 – $2.1 billion:

• Senate & Assembly income tax increase: $710M

• Assembly corporate tax increase: $1.2B for MTA & other transit

• Senate corporate tax MTA surcharge: $930M for MTA pic.twitter.com/zj4gYE319K
— Fiscal Policy Institute (@NYFiscalPolicy) March 16, 2023

Interest rates

The cost of borrowing money is represented by interest rates, which impact both consumer spending and company investment. Borrowing money is less expensive when interest rates are low, which can promote economic growth. High interest rates make borrowing more costly, which can stifle economic growth.

International trade

International trade also plays a crucial role in the economy. Trade between countries allows for the exchange of goods and services, which can increase economic growth and efficiency. However, trade can also lead to job losses in certain industries and countries, and imbalances in the trade deficit.

Components of the economy

The economy comprises three primary components: households, businesses and government. Each of these components plays a vital role in the economy and interacts with the others in complex ways.

Households

Households are the consumers of goods and services. People use the money they earn from employment or investments to pay for goods and services from companies. Due to the fact that household spending makes up a sizable share of the demand for goods and services, it has a considerable impact on economic growth.

Businesses

Businesses are the producers of goods and services. To create items and services sold to consumers or other businesses, they employ staff and invest in inputs like raw materials, equipment and technology. Business investment is critical to economic growth since it boosts productivity and creates jobs.

Government

The government plays a crucial economic role through its policies and spending. The government provides essential public goods and services such as education, healthcare and infrastructure, and it also regulates the economy to ensure fair competition and protect consumers.

Economic indicators

Several economic indicators are used to measure the health of the economy. These indicators provide insight into the level of economic activity, and can help individuals and policymakers make informed decisions.

Gross domestic product (GDP)

GDP is the total value of goods and services produced in a country over a specified period — usually a year. GDP is one of the most widely used economic indicators and provides a broad measure of economic activity.

Public sector debt excluding public sector banks was £2,507.3 billion at the end of February 2023, or around 99.2% of gross domestic product.

A debt-to-GDP ratio last seen in the early 1960s.

➡️ https://t.co/eEaU2HoHvy pic.twitter.com/rHvCU9heBg
— Office for National Statistics (ONS) (@ONS) March 21, 2023

Unemployment rate

The unemployment rate is the proportion of the labor force that is unemployed but actively looking for work. It is an important indicator of the labor market’s health and sheds light on the level of economic activity. High unemployment rates indicate a low labor market and a low level of economic activity. In contrast, low unemployment rates indicate a strong labor market and a high level of economic activity.

Inflation rate

The inflation rate gauges how quickly the average cost of goods and services is rising across an economy. Several causes, like a growth in the amount of money in circulation or a rise in the demand for goods and services, can contribute to inflation. Low inflation rates might signal sluggish economic growth, whereas high inflation rates can signal an overheated economy.

Consumer Price Index (CPI)

The CPI measures the average price of a basket of household goods and services. It is used to track inflation over time and to adjust for changes in the cost of living. The CPI is an important indicator of consumer spending patterns, providing insight into the economy’s health.

#BEFOREandAFTER

Inflation "Good News, Bad News"

The GOOD NEWS is increases to the Producer Price Index &the Consumer Price Index are slowing!

The BAD NEWS is the CPI is 4 times what it was on Inauguration Day &the PPI is triple!

I.e. Inflation has to fall over 75% for us to… pic.twitter.com/c7Req5JO4J
— Man In the Middle (@NE1Honest) March 24, 2023

Retail sales

Retail sales are a measure of the total amount of goods sold by retailers over a specified period. Retail sales can be a good indicator of consumer spending patterns. High retail sales indicate a strong economy, while low retail sales suggest weak economic activity.

Industrial production

Industrial production measures the total output of the industrial sector of the economy, including manufacturing, mining and utilities. It is an important indicator of the health of the manufacturing industry — a critical component of many economies.

Housing starts

The number of new residential construction projects that have started over a specific period is called housing starts. They are a crucial gauge of the housing market’s health and the state of the overall economy. Low numbers of home starts can signify sluggish economic activity, while high levels can suggest significant economic growth.

How does blockchain affect economic growth?

Blockchain technology has the potential to significantly impact economic growth in several ways. By enabling secure and efficient transactions, reducing costs, and increasing transparency and trust, blockchain can promote innovation, productivity and financial inclusion.

In addition, blockchain-based apps can produce fresh company models and sources of income, stimulating the economy and opening up job prospects. Because blockchain technology is still in its early stages of development and adoption, the total influence of this technology on economic growth has not yet been realized.

Yet, the ability of blockchain to revolutionize many businesses and sectors — from logistics and supply chains to finance and healthcare — makes it a viable tool for promoting economic growth in years to come.

Arbitrum’s Governance Token ARB Ranks Within Top 40 Market Capitalizations Following Airdrop

March 25, 2023 Bitcoin.com

What is fiscal policy, and why does it matter?

March 25, 2023 Coin Telegraph

Borrowing

Fiscal policy shapes economies through government spending, taxation and borrowing.

Fiscal policy is a tool used by governments to regulate economic activities in their country. It involves the use of government spending, taxation and borrowing to influence economic growth, stabilize inflation and maintain a stable economy. This article will explain what fiscal policy is, how it works, and why it is important.

What is fiscal policy?

Fiscal policy is a tool used by governments to regulate economic activities in their country. It is one of the two main categories of economic policy, along with monetary policy. The main goal of fiscal policy is to control the economy through government spending and taxation.

How does fiscal policy work?

The government has a number of ways to affect the economy through fiscal policy. One of the primary methods used is government spending. The government may boost economic activity and create jobs by raising spending, which will add more money to the economy.

Another way that fiscal policy works is through taxation. The government can boost disposable income, which in turn can boost consumer spending, by decreasing taxes. This could encourage economic expansion and boost activity.

Important old chart of mine.

Fiscal policy created inflation to a much larger extent than QE pic.twitter.com/zeT5jLqwVA
— AndreasStenoLarsen (@AndreasSteno) March 18, 2023

Finally, fiscal policy is also used for controlling inflation. If the government considers inflation to be a concern, it may raise taxes or cut spending, both of which could help to lower demand and limit inflation.

Why is fiscal policy important?

Fiscal policy is important because it can have a significant impact on the economy. By adjusting government spending and taxation, the government can influence economic growth, inflation and employment levels.

Stimulating economic growth

The promotion of economic growth is one of fiscal policy’s main goals. The government can promote economic activity and employment by raising spending. As a result, there may be an increase in tax collections and corporate and individual chances for growth in the economy.

Regulating inflation

Inflation control is another key responsibility of fiscal policy. When there is an excess of money chasing an insufficient amount of goods, inflation can result in price increases. The government can lower demand by altering expenditure and taxation, which can aid in reducing inflation.

Reducing employment

Furthermore, fiscal policy can be used to reduce unemployment. The government can promote economic activity and employment by raising spending. As a result, there may be less unemployment and more options for employment.

Managing debt

Fiscal policy can also be used to manage government debt. By adjusting government spending and taxation, the government can influence the amount of money it borrows. This can help manage the government’s debt levels and ensure that it is able to meet its financial obligations.

➡️ New: Legislature's personal income tax & corporate tax proposals would raise between $1.6 – $2.1 billion:

• Senate & Assembly income tax increase: $710M

• Assembly corporate tax increase: $1.2B for MTA & other transit

• Senate corporate tax MTA surcharge: $930M for MTA pic.twitter.com/zj4gYE319K
— Fiscal Policy Institute (@NYFiscalPolicy) March 16, 2023

Do cryptocurrencies have a fiscal policy?

Due to their decentralization and lack of centralized management, cryptocurrencies do not have a fiscal policy in the conventional sense. Yet the supply and demand of some cryptocurrencies may be impacted by the fact that they may have their own distinct monetary policies and rules written into their code.

For example, Bitcoin (BTC) has a fixed maximum supply of 21 million coins, which is hardcoded into its blockchain protocol. This means that no more than 21 million BTC can ever be created, and this limit helps to regulate its supply and demand.

Even though cryptocurrencies lack a traditional fiscal policy, the rules and protocols incorporated into their coding can nonetheless significantly affect their adoption and value. For instance, alterations to the supply or consensus algorithm of a cryptocurrency may have an impact on its security and scarcity, which may have an impact on its price and market demand.

Magazine: Best and worst countries for crypto taxes — Plus crypto tax tips

Fed balance sheet adds $393B in two weeks — Will this send Bitcoin price to $40K?

March 24, 2023 Coin Telegraph

Fed balance sheet adds 3B in two weeks — Will this send Bitcoin price to K?

Banking Crisis

The U.S. central bank's liabilities may increase if more regional banks fail, creating an upside scenario for the price of Bitcoin.

As of March 22, the Fed's balance sheet surged by nearly $94.5 billion — a $297 billion increase from the last week when the banking crisis started.

New QE hopes boost Bitcoin price

Overall, the U.S. central bank's liabilities increased by $393 billion in the last two weeks to $8.734 trillion. That is closer to the all-time high of $8.95 trillion a year ago when the Fed started its quantitative tightening program and reduced its assets by $600 billion.

*Federal Reserve balance sheet as on March 24. Source: FRED*

The Fed released the data on March 23, coinciding with Bitcoin (BTC) price rallying 5.5% toward $29,000. The rise occurred amid speculations that the Fed's expanding balance sheet results from quantitative easing (QE).

*BTC/USD daily price chart. Source: TradingView*

But the Fed did not use new dollar reserves to purchase long-term treasuries. Instead, the central bank dropped its U.S. Treasury holdings by $3.5 billion to $7.937 trillion, suggesting that quantitative tightening is still in place to curb inflation.

On the other hand, Fed's balance sheet grew because it dispatched short-term loans to the ailing banking sector.

Notably, as of March 22, the Fed slashed the usage of its "discount window," which helps commercial banks manage short-term liquidity needs, by $42 billion. Instead, it allocated the same $42 billion to its brand new Bank Term Funding Program (BTFP).

*Federal Reserve BTFP funding reserves. Source: FRED*

The other $60 billion went to the Fed's swaps facility that provides liquidity to offshore banks.

*Foreign official repo agreements at the Fed. Source: FRED*

The Fed's tightening policy and lending facilities to regional and offshore banks risk drying up cash liquidity. This may boost the dollar's valuation versus other top foreign currencies, which, in turn, could push Bitcoin's price lower in the short term.

Interestingly, the U.S. dollar index has gained 1.5% since the Fed's balance sheet update.

*DXY daily price chart. Source: TradingView*

Has the banking crisis peaked?

The ongoing credit crisis may not have peaked despite Fed's $393 billion emergency lending to banks, however, if one considers Janet Yellen's blurred outlook on depositors' insurance.

On March 21, the U.S. Treasury Secretary confirmed protecting uninsured depositors over $250,000 "if smaller institutions suffer deposit runs" such as those witnessed in Silicon Valley Bank and Signature Bank.

But Yellen did a U-turn the next day in her statements to the Senate that she had not considered “blanket insurance or guarantees of deposits.” The bank stocks tanked in response to her statement, resulting in another U-turn.

*KBW Nasdaq Bank Index weekly performance chart. Source: TradingView*

Yellen then told the House on March 23 that the authorities "would be prepared to take additional actions if warranted."

Janet Yellen is too old, incompetent or a liar.

Choose your poison. https://t.co/Vy8CJZm2x1
— The Wolf Of All Streets (@scottmelker) March 23, 2023

In any case, the market will need to wait for the balance sheet data next week to determine whether or not the Fed's liabilities are declining.

But if these emergency lending facilities keep rising after more bank collapses, then QE will be inevitable, similar to what happened after the 2008 global financial crisis.

“The return of (stealth) QE via the BTFP and opening of daily Swap Lines with friendly foreign Central Banks clearly signals that sovereign debt will be monetized and currencies will be further debased. The endgame is now undeniable.” https://t.co/s5enNAJCZi
— Balaji (@balajis) March 24, 2023

BTC price technicals hint at $40K

An expanding balance sheet — with or without QE — has proven bullish for Bitcoin in the past. This correlation will continue if the banking crisis deepens, according to Stack Hodler, the author of crypto-focused Stack Macro newsletter.

*Fed balance sheet versus Bitcoin price performance. Source: TradingView*

"BTFP, Swap Lines, TPI - It's All QE," the analyst noted, adding:

"It all leads to balance sheet expansion and fiat currency dilution despite plenty of Central Bank fans that will tell you otherwise."

From a technical perspective, Bitcoin price is well-positioned for a run-up toward $40,000 by June, or 50% higher from today's price.

*BTC/USD weekly price chart. Source: TradingView*

As illustrated above, the upside target originates from Bitcoin's inverse-head-and-shoulders (IH&S) breakout setup on the weekly chart.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

inflation