Bitcoin climbed to a one-month high on Monday, surging by as much as 4.69 percent to an intraday high of $58,400, leading many analysts to expect a continued price rally towards $60,000.
The renewed optimism in the flagship cryptocurrency market came as the US stocks edged lower, pressured by slipovers in bank shares. Investors feared contagion effects after former Tiger Asia manager Bill Hwang’s Archegos Capital Management reportedly sold $30 billion in holdings in a handful of companies, including ViacomCBS and Discovery.
Shares of Credit Suisse and Nomura Holdings, two banks that dealt with Achegos, also fell over worries that they may struggle to recoup money lent to the client.
The Dow Jones Industrial Average was down 90.28 points, or 0.28 percent, to 32,986 points in the early New York session. The S&P 500 shed 0.5 percent to 3,953 points while Nasdaq Composite slipped to 12,999.71 after dropping the value of 1.06 percent off its valuation.
On the other hand, Bitcoin, which some investors consider their hedge against global market uncertainty, rose.
Bitcoin received further upside boost from Visa that forged a new connection with the cryptocurrency sector.
The global payment giant announced that it had settled a transaction on its legacy systems using Ethereum, the second-largest cryptocurrency network after Bitcoin. Visa used stablecoin USDC — built atop the Ethereum blockchain — for the said transaction, adding that it has partnered with crypto-enabled payment card service, Crypto.com, to offer USDC-enabled settlement services to clients later this year.
“Crypto-native FinTechs want partners who understand their business and the complexities of digital currency form factors,” said Jack Forestell, executive vice president and chief product officer, Visa.
“The announcement today marks a major milestone in our ability to address the needs of fintech managing their business in a stablecoin or cryptocurrency, and it’s really an extension of what we do every day, securely facilitating payments in all different currencies all across the world,” he added.
What’s Next for Bitcoin?
Bitcoin’s latest move uphill took it out of its prevailing consolidation channel.
The falling channel appears like a Bull Flag, a bullish continuation pattern that forms as an asset consolidates following a strong uptrend. Bitcoin has repeatedly formed similar consolidation patterns in its yearlong rally, led by ultra-loose central bank policies that sapped investors’ appetite for government bonds and the US dollar over their dismissive investment returns.
Therefore, if the current breakout extends further to the upside, Bitcoin would easily hit $60,000, followed by a retest of its previous record high at $61,778 (data from Coinbase).