LBank Breaks Down Bitcoin’s Double-Digit Price Surge

Road Town, BVI, 25th March, 2023, Chainwire

Global cryptocurrency exchange LBank has analyzed Bitcoin’s spot performance, which has culminated in an eight-month high of $28,000. LBank Co-founder Johnason Chan and LBank Labs board of directors member Czhang Lin have provided in-depth analysis of the price increase. 

Shortly after the collapse of Silvergate Bank, Silicon Valley Bank (SVB), and later Signature Bank, liquidity concerns for decentralized fintech players piled up. Many believed a valuation drop would have been inevitable for crypto. However, Bitcoin has performed beyond expectations, starting the week off with a 27% rise to just below $28,000. At the time of writing, the world’s largest digital asset by market capitalization seems to have stabilized, continuing to hover around $28,000.

The market movement of Bitcoin is hard to make sense of, considering the ongoing unraveling of a banking crisis and expectations of further US interest rate hikes. However, “while the traditional finance banking crisis is still working on solving its liquidity issues, many institutions seek Bitcoin assets as alternative hedging products,” LBank LabsCzhang Lin explained.

“Earlier this week, LBank’s Bitcoin trading volume more than doubled compared with the previous two months, which aligns with market trends,” LBank’s Johnason Chan commented. “One reason for this surge is that as investors are confronted with the fragility of TradFi, their appetite for risk grows. A double-digit rise is historically rare. This rise directly reflects market sentiment, especially in the US.”

The implosion of SVB has made an impact on stablecoins, particularly Circle’s USDC, the second-largest stablecoin by market cap. USDC briefly lost its peg with the dollar when Circle revealed that some of its cash reserves were parked with SVB. Nevertheless, even with other stablecoins beginning to lose their dollar peg, the initial panic failed to spark a full-on sell-off. “In light of the stablecoin fiasco, people are going back to Bitcoin,” Lin shared.

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“There’s another reason for this surge,” Chan added. “It comes amid a short squeeze, which historically sends prices higher. On Monday, traders liquidated $300 million worth of crypto positions, with $160 million in short positions. Futures play a crucial role in the crypto market, sometimes leading to market trends. After things cool off, prices will probably temporarily fall back to their usual spot.”

“The Bitcoin rally reflects people’s loss of confidence in the central banking system. Yet, it is important to note that the macroeconomics are still weak and the sum of capital injection on-chain is relatively low. An outflow in digital asset investment products is continuing. We need to understand the drawbacks,” Lin concluded.

About LBank

LBank is one of the top crypto exchanges, established in 2015. It offers specialized financial derivatives, expert asset management services, and safe crypto trading to its users. The platform holds over 9 million users from more than 210 regions across the world. LBank is a cutting-edge growing platform that ensures the integrity of users’ funds and aims to contribute to the global adoption of cryptocurrencies.

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Source: https://thecryptobasic.com/2023/03/25/lbank-breaks-down-bitcoins-double-digit-price-surge/?utm_source=rss&utm_medium=rss&utm_campaign=lbank-breaks-down-bitcoins-double-digit-price-surge