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Bitcoin (BTC) reclaimed $29,000 overnight into May 4 as the United States banking crisis risked spawning new victims.
Gold, Bitcoin benefit from U.S. banking mayhem
Data from Cointelegraph Markets Pro and TradingView tracked a swift mood change for BTC/USD, which hit $29,242 on Bitstamp.
The pair had sunk to daily lows at the previous dayâs Wall Street open as markets awaited the Federal Reserveâs decision on interest rates.
At the same time, more U.S. regional bank stocks were suffering, with the trend remaining as the Fed confirmed its much-anticipated 0.25% hike.
One lender, PacWest Bancorp, reportedly announced that it was considering a buyout, pressuring the regional bank sector even further while boosting havens, including Bitcoin.
Gold even hit new all-time highs as market commentators criticized the Fedâs approach and predicted the end of rate hikes altogether.
âThe biggest joke is the fact that Jerome Powell says that the banking system has improved and is healthy, sound and resilient. Itâs the weakest it has ever been and another few banks have been falling apart after market,â MichaĂ«l van de Poppe, founder and CEO of trading firm Eight, reacted.
âThis was the last hike.â
Van de Poppe referenced comments on the regional banking sector by Fed Chair Jerome Powell, which accompanied the rate decision.
âConditions in that sector have broadly improved since early March, and the U.S banking system is sound and resilient,â he said in a statement prior to a subsequent press conference.
âWe will continue to monitor conditions in this sector. We are committed to learning the right lessons from this episode and will work to prevent events like these from happening again.â
US Regional Bank Stocks After Hours:
1. PacWest, $PACW: -60%
2. Western Alliance, $WAL: -30%
3. Metropolitan Bank, $MCB: -20%
4. Valley National, $VLY: -15%
5. HomeStreet, $HMST: -11%
6. Zions Bank, $ZION: -10%
7. KeyCorp, $KEY: -8%
8. Citizens Financial, $CFG: -5%âŠ
â The Kobeissi Letter (@KobeissiLetter) May 3, 2023
Others were far from convinced, however.
Arthur Hayes, the former CEO of derivatives exchange BitMEX, revealed that he was already hunting for failing regional banks. Markets, he argued, could depend on the next move by either Powell or Treasury Secretary Janet Yellen.
âYou never know what is the trigger that causes Yellen or Powell to cave and bail everyone out. Itâs all politics now and politics is more about power than rational decisions,â part of a tweet read.
Financial commentator Tedtalksmacro additionally noted that the Fed funds rate was now at its membersâ own expected peak.
Back in March, the majority of FOMC participants said that the terminal rate for this tightening cycle would be 5-5.25% â> thatâs where we are now. pic.twitter.com/50d4EMG7Fg
â tedtalksmacro (@tedtalksmacro) May 3, 2023
An âimportant signalâ
Turning to Bitcoin: reclaiming $29,000 provided a much-needed bullish counterpoint to recent price action.
Related:Â BTC price may need a $24.4K dip as Bitcoin speculators stay in profit
Eyeing changes in the Binance order book, monitoring resource Material Indicators showed that whale buying power had gained the upper hand through the news events.
âAfter clearing out most of liquidity in the range before the FOMC FED rate hike announcement, BTC whales had no problem eating through the remaining liquidity and reclaimed $29k,â it summarized.
Market participants thus hoped that further liquidity squeezes could come next, fueling a trip above the $30,000 barrier.
If #bitcoin keeps trending up there is a lot of liquidity between $31k – $35k.https://t.co/sqKr3pvbYP pic.twitter.com/i3DTDKcvu6
â Philip Swift (@PositiveCrypto) May 4, 2023
âEven though Gold is attacking ATHs, Bitcoin continues to outperform it,â Checkmate, lead on-chain analyst at Glassnode, noted, having called goldâs new highs an âimportant signal.â
A tweet including Glassnode data showed the increase in BTC/XAU since the start of 2020.
Even though Gold is attacking ATHs, #Bitcoin continues to outperform it.
Shows periods where BTC was the superior asset to hold over that 30-day period.
On 1-Jan 2020, 1 $BTC = 4.9 oz Gold
Today, 1 $BTC = 14.2 oz Gold>https://t.co/RLd2sM90xh https://t.co/eYJNRmI3Rh pic.twitter.com/3YaQi9VjU8
â _Checkɱate âĄâąïžïž (@_Checkmatey_) May 3, 2023
Magazine: Unstablecoins: Depegging, bank runs and other risks loom
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
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