Bitcoin is set to post its best quarterly performance since the first quarter of 2021, partially recovering from a bruising year in which crypto prices got crashed under the boot of global monetary tightening and high interest rates. The latest rally could be attributed to the turmoil in the financial sector, a softer dollar and increasing speculations of a Fed pivot. Nevertheless, the industry continues to suffer from systemic failures and frauds, which currently seem to have put a ceiling in Bitcoin’s price.

Terrific first quarter for cryptos

On Thursday, Bitcoin breached $29,000 for the first time since June 11 of 2022, extending its gains to more that 70% year-to-date. The phenomenal performance has come on the back of a significant change in the macroeconomic backdrop following the recent crisis in the banking sector. Due to those events, market participants are largely weighing the chances of a less aggressive monetary path by the Fed, even if Fed officials have repeatedly pushed back against those expectations.

Some investors downplay the importance of the latest advance as Bitcoin came off its second-worst year ever, thus suggesting that this could just be a temporary correction. However, it is important to note that in contrast to previous bull markets, this one did not occur in a period of super low interest rates and excess liquidity.

Binance jitters and profit taking hit pause on Bitcoin’s rally

Although Bitcoin posted a fresh high on Thursday, it failed to advance further and experienced a mild pullback probably due to some profit taking and the emerging regulatory risks surrounding the biggest crypto exchange, Binance. Up until now, crypto investors have repeatedly shrugged off systemic risks such as the collapses of FTX and Silvergate, but it could be different this time around with Binance.

On Monday, the Commodity Futures Trading Commission announced that it filed an enforcement action against Binance and its CEO Changpeng Zhao for numerous violations concerning rules meant to prevent money laundering and financial transactions related to terrorism. This investigation comes in a period when crypto traders eagerly await the outcome of the SEC’s regulatory scrutiny on Coinbase, which is also accused of several law infringements. As expected, liquidity concerns have emerged following those developments, while Binance’s removal of zero-fee trading last week made matters even worse.

XRP storms to fresh 10-month high

A surprising gainer during this week is the altcoin XRP, whose network called Ripple is mainly used by banks to facilitate remittance payments or exchanges between fiat money and digital currencies. XRP rallied more than 50% in the past two weeks, storming to a fresh 10-month high of $0.5844 on Wednesday on speculation that its originator, Ripple labs, will win its legal battle against SEC. The US regulator has accused Ripple labs and its two executives for raising over $1.3 billion through the sale of XRP in an unregistered securities offering to investors in the US.

Taking a technical look, we can see that XRPUSD exploded to a fresh 10-month high before paring some gains. In the last couple of daily sessions, the price remains rangebound, hinting that the outcome of the much-anticipated trial could determine the direction of the next breakout move.

If the tight range breaks to the upside, the recent 10-month peak of $0.5844 could be the first barricade for the bulls to conquer, whereas to the downside, the November resistance territory of $0.5100 could curb initial declines.