Bitcoin (BTC) broke through resistance levels that have held strong for almost a year on March 20 — hitting a nine-month high of $28,400.
The recent price growth came after the Federal Reserve announced that it has partnered up with major central banks around the world to support dollar cash flow “to ease strains in global funding markets.”
Central banks unite
The Federal Reserve said on March 19 that it would take coordinated action with other central banks offering U.S. dollar operations — namely the European Central Bank, the Bank of Canada, the Bank of England, the Bank of Japan, and the Swiss National Bank — to ensure the supply of credit to households and businesses remains unaffected.
The central banks will increase the frequency of seven-day U.S. dollar maturity operations from weekly to daily starting March 20.
The swap lines will remain active until at least the end of April, according to the press release.
Markets expect regulators will also slow down their rate hikes amid the banking crisis that has claimed multiple U.S. banks and Credit Suisse, so far.
The last time central banks introduced such levels of liquidity into funding markets was at the start of Covid-19 lockdowns and analysts expect Bitcoin to continue its surge as the excess money pumped into the economy makes its way into the asset.
Renewed interest in BTC
BTC is now up more than 28% over the past week and trading at $28,290 as of press time. The troubles in the traditional banking system seem to have shaken up trust in traditional assets and more money is starting to flow into Bitcoin.
According to CoinGlass data, open interest in Bitcoin futures hit $12 billion over the weekend which points to renewed interest in the flagship cryptocurrency.
The $12 billion is a yearly high and might be the precursor to a new bull run driven by the extra liquidity that central banks will introduce into markets in the coming weeks.
Meanwhile, most altcoins are experiencing a similar pump, with most of the top ten cryptocurrencies by market cap posting gains between 5% to 15% over the past week.
BTC has gained the most out of major cryptocurrencies in the last seven days showing its resilience to turmoil and instability in financial markets. Recent weeks are a testament to Bitcoin steadily becoming the “safe haven” asset it was created to be.