bitcoin could be weak at spot rates, falling about 13% from $74,800 amid intense sell-off pressure.
Even as prices retreat from their all-time highs and $66,000 turns out to be a mirage, analysts remain optimistic about what lies ahead. Most expect the coin to rise towards the most important psychological line, $100,000, in the coming days or weeks.
A banking crisis in the United States?
The rise would be accelerated if bitcoin took advantage of the “digital gold” narrative that is rapidly gaining traction amid growing concerns about the financial health of banks in the United States.
Carrying x, an observer x.com/thomas_fahrer/status/1803598693540700539″ target=”_blank” rel=”noopener nofollow”>grades A report from the Federal Deposit Insurance Corporation (FDIC) shows that 68 banks in the United States accumulate more than $500 billion in unrealized losses. Most of these losses in their various portfolios come from investment securities and are worsening with rising mortgage rates.
In its report, the FDIC notes that this is the ninth consecutive quarter in which banks continue to have “unusually high unrealized losses.” If this persists, there is a real risk that these banks will destabilize US financial markets.
The current state of banks in the United States has parallels with the global financial crisis of 2008. However, any banking instability could favor bitcoin and safe haven assets such as gold. As history has shown, following the collapse of Silicon Valley Bank (SVB), Silvergate Bank and Signature Bank, btc and eth prices recovered.
Managers could be forced to re-evaluate their positions if the trend of increasing unrealized losses at the US FDIC continues in the coming quarters.
Eyes on BTFP and CRE program: time to consider bitcoin?
In this scenario, the US Federal Reserve's emergency Bank Term Financing Program (BTFP), launched in response to the bank failures of early 2023, could play an important role.
This program, which offers unstable bank loans in exchange for collateral, could strongly support the banking system, influencing btc prices.
Beyond this, the commercial real estate (CRE) market appears to be more troubled. While Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, recently minimized At the risk of a widespread crisis, it is well known that some large banks, including those struggling with the most unrealized losses, have significant exposure.
While the implementation of stricter regulations after the 2007-08 global financial crisis helps, it remains to be seen how the system will absorb the shocks should cracks occur. If this happens, btc will likely benefit from the current consolidation.
Featured image from Canva, TradingView chart
