Bitcoin hovers around $28,000, hits highest level in 9 months

Yahoo Finance’s David Hollerith joins the Live show to discuss bitcoin hitting its highest price level in nine months and the outlook for the crypto space.

Video transcript

BRAD SMITH: Bitcoin. BTC USD hovering around $28,000 after hitting its highest level in nine months as investors look to the Fed decision as the next key benchmark. Yahoo Finance's David Hollerith joins us now live in living color from Nashville, Tennessee. David, what are you tracking with Bitcoin right now, and can we push through that $30,000 mark, do you think?

DAVID HOLLERITH: Well, Brad, you know, if you look at the futures market for Bitcoin, the strike price-- the highest level strike price is at the $30,000 mark. The highest amount of expirations is for the end of March. So there's definitely-- I think you could say the majority of at least long positions are looking for that $30 mark.

It has been interesting just given that last week Bitcoin saw one of its highest weekly gains on record. And so the cryptocurrency's price has been mostly consolidating leading up to the Federal Reserve's decision on Wednesday.

And, you know, just to give you an idea of where we came from, you know, this rise we saw last week was effectively from $24,000 to this $28,000 mark. Now for the last two days or so, Bitcoin has kind of been hovering around that.

And the big question here is how much the banking crisis is playing into this and whether or not people are moving to Bitcoin as a safe-haven asset. And that question is, honestly, very difficult to prove and I would argue not provable yet.

So we also obviously have the Fed potentially giving a 25-basis-point hike or even less at this next decision. So that's also very good for risk assets or better than what could be.

And I wanted to point out too that FTX's collapse and also more recently Silvergate and Signature Bank have gone offline, liquidity or sometimes called market depth for Bitcoin has dropped across exchanges. Research firm Kaiko has pointed this out yesterday.

And this has been such a substantial drop that what it means is that price-- or orders on Bitcoin, whether they're buy or sell orders, can more easily influence the price movement of the asset. So that's definitely something to watch for, especially on weekends when trading is lower.

So that might have a little bit to do with what's going on with these movements. I don't know if you've noticed them, but even when we say tight trading range, Bitcoin's been relatively more volatile than it was, you know, towards the end of last year.

But that being said, Matrixport, another firm, has sort of put out that in this most recent rally, US investors appear to be sort of the majority investor, regional investors who are buying Bitcoin. So that's obviously something interesting to see.

Again, not going to find an answer on Wednesday about-- no matter what the Fed does about whether or not investors are looking to it as a safe haven yet.

JULIE HYMAN: No, but we'll be able to watch the price action at least. Thanks so much. Dave Hollerith, appreciate it.