Bitcoin might be on its way to hitting the significant $100,000 mark as the “digital gold” narrative strengthens amid an impending banking crisis in the United States.
According to the Federal Deposit Insurance Corporation’s (FDIC) quarterly report published on May 29, at least 63 U.S. banks faced insolvency in the first quarter of 2024, an increase from 52 banks in the third quarter of 2023.
These banks collectively hold $517 billion in unrealized losses, a $39 billion rise from the previous quarter, marking the ninth consecutive quarter of unusually high losses. The FDIC report noted:
“Higher unrealized losses on residential mortgage-backed securities, resulting from higher mortgage rates in the first quarter, drove the overall increase.
:This is the ninth straight quarter of unusually high unrealized losses since the Federal Reserve began to raise interest rates in the first quarter of 2022.”
Concerns about the U.S. banking system escalated after the collapse of Silicon Valley Bank (SVB) and the liquidation of Silvergate Bank in March 2023.
New York regulators also shut down Signature Bank shortly after Silvergate’s liquidation.
In response, the Federal Reserve introduced the Bank Term Funding Program (BTFP), offering banks loans up to a year with “qualifying assets” as collateral.
BitMEX co-founder Arthur Hayes claimed this emergency measure initiated the Bitcoin bull run in 2023. Hayes remarked at Korea Blockchain Week:
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“Me and the rest of the market rightly saw through this as basically them admitting that they caused this problem — the structure of the banking system — and this is one of the ways you can fix it, which is: print more money.”
Bitcoin surged 26% from $21,900 to $28,054 during the week of March 13, 2023.
Jamie Coutts, chief crypto analyst at Realvision, highlighted the FDIC report’s validation of his price action model, anticipating Bitcoin to solidify above $63,000 before further gains. Coutts noted on June 4:
“After some nice coiling pricing action since March, my boring Bitcoin Trend model triggers. DXY down, Yields and Corp Spreads are lower.
“Can you smell that, son? That’s the smell of central bank liquidity in the air…”
Crypto analyst Trader Tardigrade also predicted a breakout to $100,000, stating on June 5:
“I’m not surprised that Bitcoin has broken out the recent Bull Pennant after the Breakout of Bull Flag. Both Bull Pennant and Bull Flag are promising chart patterns.
“The next surge could reach over $100k.”
Inflows from U.S. spot Bitcoin exchange-traded funds (ETFs) could further boost Bitcoin’s momentum. U.S. Bitcoin ETFs have seen net positive inflows for fifteen consecutive days as of June 4.
Despite the bullish outlook, Bitcoin faces significant resistance at $72,000, where breaking above could liquidate over $922 million in leveraged short positions, according to Coinglass data.
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