The collapse of First Republic Bank marks the volatile start of a busy macroeconomic week, while bitcoin has been under downward pressure.
Bitcoin kicked off the new week amid shocking macroeconomic news, as the U.S. witnessed the second-largest bank failure in history.
After a sideways weekend, BTC is swinging on new weekly and monthly candles as the downtrend begins.
After stabilizing below $29,000, price action came under further underlying pressure as First Republic Bank officially went bankrupt and was taken over by JPMorgan.
It was announced during the Asian session but before Wall Street opened as the Federal Reserve (Fed) is due to announce its next interest rate decision in what is expected to be a tense week.
With so much news to take in, many surprises in the crypto market are evident.
This article will examine these risks and more with a weekly analysis of cryptocurrencies in general (Bitcoin in particular) and price triggers.
price fluctuations bitcoin end of month increase through
The classic flash swings are clearly reflected in Bitcoin’s volatility, forming new weekly and monthly candles after a flat in April. At the time of writing, Bitcoin was trading at $28,522, down 2.13% on the day but up 4.20% for the week.
BTC 1-hour candlestick chart | Source: TradingView
After closing the month at $29,300, the crypto king quickly slipped as bidding liquidity was pulled from Binance’s order books.
As a result, the price formed a local low of $28,289, according to monitoring source Material Indicators.
source: Material index
As a result, Bitcoin hit the “escape” targets of many, including Michael van de Poppe, founder and CEO of trading firm Eight. He believes that the underlying strength has returned to the altcoin market.
“Bitcoin failed to hold $29,200 after multiple tests. One return hit $28,300. Altcoins are going from strength to strength,” he concluded on the day.
source: michael van der pop
A day earlier, Van de Poppe warned that without retaking $30,000, Bitcoin will not be able to resume its uptrend and correctly predict the eventual reversal.
source: michael van der pop
Meanwhile, popular cryptocurrency trader Crypto Tony has confirmed that he is waiting for support at $28,300 to prove himself before placing an order to enter a position.
source: Crypto Tony
That level is also important to other traders, including Ninja, while Sun Tzu agrees that without a clear break above the $30,000 area, there is still a risk of a long-term downtrend.
“BTC is still range-trading within this key resistance area. As always, never assume resistance will be breached as the risk-reward ratio for bulls is very low. Plan remains unchanged unless BTC breaks $31,000,” he said in May 1 to his Twitter followers.
JPMorgan to take over First Republic Bank in second-largest bank failure exist U.S.
In stark contrast to last week, macroeconomic events will be in focus in the coming days as the Federal Reserve is set to meet to decide on rate changes.
Although already priced in by the market, the imminent 0.25% increase that may be announced at the May 3 meeting of the US Federal Open Market Committee (FOMC) is still far from certain.
The ins and outs are still very complicated. The Fed is raising rates despite growing signs of a recession at home, and a more immediate danger lurks in the banking crisis that has been dragging on since March.
As of May 1, the Federal Deposit Insurance Corporation (FDIC) is openly accepting shares of First Republic Bank (FRB), whose shares have fallen 75% in April alone. Lenders including PNC Financial Services Group, JPMorgan Chase & Co and Citizens Financial Group were among the banks bidding for the FRB and eventually JPMorgan Chase & Co.
Previous reports indicated that the deal was supposed to be finalized and announced before Asian trading began, but took longer and was announced around 3pm (UTC).
source: Holger Zapitz
While the direction remains unclear, attention is on the Fed. Because in the current situation, the agency decided to raise interest rates further, which may further destabilize the banking industry.
As Arthur Hayes – Former CEO of Cryptocurrency Trading Giant BitMEX warn At the end of last month, the United States could be caught in the crossfire.
“The Fed addresses this by backing a larger portion of U.S. banks’ balance sheets. Money printing starts”.
At the same time, Hayes echoed the long-term price target of $1 million for BTC given by various places recently.
According to Instruments, betting on a Fed decision to raise rates after the FRC news is priced at a 90% chance of 0.25% fed watch CME Group.
Fed Rate Target Probability Map | Source: CME Group group
Meanwhile, for bitcoin traders, the FOMC meeting itself marks a potential price turning point.
“It looks like bitcoin is going to be a stablecoin again, this time around $29,200. Obviously due to the weekend, but I think it’s going to be relatively stable that way until Wednesday. On Wednesday we have the FOMC meeting and this highly anticipated event will be Perfect impetus,” noted trader Jackis predicted before the end of the month.
FOMC days tend to trigger volatility across the cryptocurrency market, though often quickly and characterized by “fakeouts,” in which buying and selling liquidity is established before prices return to previous levels.
April Still Better than February’s Bitcoin Price Performance
April avoided the title of worst month of 2023 despite current concerns over BTC price strength.
Data from monitoring resource Coinglass shows a total return of 2.8% for BTC.
Monthly Profit Chart eliminatebitcoin | source: coin glass
These figures surpassed February’s, but did not increase significantly, while maintaining Bitcoin’s “green” record for the year to date.
On the weekly time frame, however, things look less appealing, with weekly candlestick consolidation emphasizing the stubborn nature of the $30,000 resistance.
BTC 1-week candlestick chart | Source: TradingView
Some remain bullish, such as the popular Twitter account Mickybull Crypto, which ignores weekend price action as a standard chart feature.
“This price action happened most of the weekend. Note: An important element of technical analysis is being able to determine what has happened, what is happening, and what might happen. Meanwhile, BTC’s weekly and monthly The close is all bullish.”
source: Mickey Boolean Cryptocurrency
woodtrade on chain challenge record level
Essentially, on-chain activity tells the fascinating story of Bitcoin’s growth as early as 2023.
According to on-chain analytics firm Glassnode and others, daily bitcoin transaction volume is approaching new all-time highs after “explosive” growth this year.
quantity trade eliminatebitcoin | Source: Glassnode
in a topic Twitter analyzed the overall strength of the BTC uptrend, and Glassnode admitted that on-chain transaction volume has yet to match.
“Bitcoin transaction count, address activity, inscriptions, Mempool congestion, HODL levels, and sub-$30,000 supply are all on the rise. Still have faith. But the uptrend is not mature yet, and on-chain volumes are not yet supported by upticks.”
The accompanying table shows the actual unspent prices allocated to the various market groups.
Actual Unspent Price Distribution Chart according to entity eliminatebitcoin | Source: Glassnode
Next, Glassnode’s top on-chain analyst Checkmate remains optimistic Regarding the possibility of Bitcoin continuing to rise and the low in late 2022 marking a local bottom.
“Best estimate: The uptrend is plausible and likely on the floor. However, new inflows are limited and remain dominated by existing holders. As a result, expect prices to zigzag up and down and traders will Impact on low time frames and liquidity. Potential for macro upside and massive gains for bulls along the way.”
Crypto market greed rises to near multi-year highs
While prices fluctuated up and down, market sentiment improved after falling in late April.
The latest data from the Crypto Fear and Greed Index shows that the “greed” trend in the market is returning to the level seen in November 2021 when Bitcoin hit an all-time high of $69,000.
However, as a lagging indicator, fear is not correlated with greed, as sentiment is currently influenced by relatively small market changes.
This reiterates the importance of current resistance levels for Bitcoin and ETH, especially as the two assets face decision lines at $30,000 and $2,000, respectively.
Fear and Greed Index | Source: Alternative me
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As reported by Cointelegraph