The upcoming bull run signals are coming from Bitcoin (BTC), which has not been affected by the USDC stablecoin crisis. Bitcoin’s price has remained strong at $20,000 even during the downturn, with some indications pointing to an impending bull run. Meanwhile, according to some experts, traders are recovering from the effects of the USDC crisis.
Bitcoin held $20,000 tight!
cryptocoin.comAs you follow, Bitcoin and Ethereum, which suffered significant losses on Friday due to the spread of potential contagion risks to crypto markets from the failure of Silicon Valley Bank (SVB), have made significant gains in the last 24 hours. In the midst of such banking industry disasters, the crypto community was reminded of the fundamental principles that underpin Bitcoin and the reasons why it was first introduced in the weeks after the collapse of Lehman Brothers in 2008.
The broader crypto market has been reeling under heavy pressure from the ongoing stablecoin crisis, which began as USDC issuer Circle had $3.3 billion in reserve deposits at the troubled bank. Despite this, the leading crypto Bitcoin bravely maintained the $20,000 level. However, Bitcoin embarked on a roller coaster ride this year, breaking the $25,000 psychological barrier and then returning to the $19,000 region within a few short months.
The total crypto market cap has dropped below $920 billion for the first time since November, following widespread media coverage of USDC and other stablecoins losing their $1 stablecoin. In just the past day, over $200 million in crypto-tracked futures contracts have been liquidated. The liquidation of Bitcoin futures reached nearly $60 million, the highest amount among major cryptocurrencies. Still, even that wasn’t enough to shake up the precious creation of Satoshi, which according to the price chart is currently showing a healthy pullback as it prepares for an even bigger recovery.
Is Bitcoin getting ready for a bull run?
According to a prominent crypto analyst, Bitcoin’s price reflects similar patterns, comparable to those observed in 2015 and 2020 just before BTC embarked on a major bull run. From a purely statistical standpoint, this has happened roughly six times in 2015 and twice in 2020. Additionally, he stresses that Bitcoin took a slow and ‘methodical’ approach to 2015, that this will be gradual but almost certain to happen.
However, BTC’s technical analysis (TA) indicators suggest a ‘Sell’ position as summarized by its moving averages. That’s why it’s worth paying attention to. Currently, Bitcoin (BTC) price is trading at $20,414, up 2.8% in the last 24 hours, as opposed to the 9% drop recorded over the past seven days.
Some traders get rid of USDC fears
Meanwhile, some market analysts fend off long-standing USDC fears by pointing to the token’s US treasury support. One crypto Twitter community member said, “80% of their holdings are in the form of 6 million US Treasury Bills. 85% of these bonds have been rolled over in the last 3 months. Interest rate risk is negative,” he wrote.
Meanwhile, Adam Cochran, partner at crypto fund CEHV, said the FIDC-insured nature of the SVB suggests that fears over USDC’s longevity have been exaggerated. “Comparable to the FDIC recovery process,” Cochran said. The organization immediately received 62% of balances paid under the FDIC ‘advanced dividend’ process and reclaimed 94% with final payment. If similar in SIVB, Circle’s maximum damage will be $198 million, up from $3.3 billion.”
Elsewhere, North Rock Digital co-founder Hal Press tweeted, citing official documents, that 77% of Circle’s reserves are held in US treasury bills. This means that the theoretical floor price of USDC is 77 cents. In this context, Press said, “Circle holds 77% of its reserves in Treasury Bills of 1-4 months. These Treasury Bills are held at BNY Mellon and managed by Blackrock. This provides an absolute floor of 0.77 in USDC,” he said.
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