Bitcoin (BTC) may be poised to reach the milestone of $100,000 as the narrative of it being “digital gold” gains traction amidst the looming banking crisis in the United States.
By the first quarter of 2024, at least 63 U.S. banks were teetering on the edge of insolvency, a significant increase from the 52 banks listed on the “Problem Bank List” in the third quarter of 2023, as reported by the Federal Deposit Insurance Corporation (FDIC) on May 29.
These troubled banks are facing a collective $517 billion in unrealized losses, a $39 billion surge from the previous quarter. This marks the ninth consecutive month of high unrealized losses, according to the FDIC’s report. The health of the U.S. banking system has been a growing concern since March 2023, when Silicon Valley Bank collapsed suddenly, Silvergate Bank voluntarily liquidated, and Signature Bank was shut down by New York regulators shortly after Silvergate Bank’s liquidation.
Following these events, the Federal Reserve introduced the Bank Term Funding Program, offering loans to banks for up to a year in exchange for collateral in the form of “qualifying assets.” This emergency measure kickstarted the Bitcoin bull run in 2023, according to BitMEX co-founder and former CEO Arthur Hayes.
Bitcoin saw a 26% surge from $21,900 to $28,054 during the week of March 13, 2023. Since the onset of the banking crisis in March 2023, Bitcoin’s price has soared over 148%, currently trading at around $70,000.
Jamie Coutts’ price action model, as validated by the FDIC’s report, predicts that Bitcoin will find strong support above $63,000 before continuing its upward momentum. Based on historical chart patterns, Bitcoin’s price could be heading towards a breakout to the $100,000 mark.
Inflows from U.S. Bitcoin ETFs are also expected to bolster Bitcoin’s upward trajectory. Institutional inflows from ETFs played a crucial role in the recent rally to new all-time highs. However, Bitcoin is facing resistance at the $72,000 mark, with a potential break above leading to the liquidation of over $922 million worth of leveraged short positions.
It is important to note that this article does not provide investment advice. Every investment decision carries risks, and readers are advised to conduct their own research before making any financial decisions.