Crypto responds to First Republic bailout

Bitcoin (BTC) took a pummeling on Monday by tumbling 4% throughout the trading session in response to a surge on the US dollar.

US manufacturing PMI data came in hot, causing the brief rally on the greenback and sending the BTC/USDT pair as low as US$27,670. 

Then came the inevitable brokering of a deal to sell struggling US regional lender First Republic North to JPMorgan Chase & Co (NYSE:JPM). in a US$10.6bn takeover.

Edward Moya, senior market analyst at Oanda, surmised that this actually fuelled confidence in the traditional financial system, possibly to the detriment of bitcoin, which found favour in recent times of TradFi turmoil.

“Bitcoin is struggling here as Wall Street grows confident that the banking crisis risk has been removed from the table. It is looking like the US banking system has a playbook to deal with the next banking crisis when it emerges, which is somewhat dampening the case for cryptos,” wrote Moya in an email.

Long-bitcoin liquidations smashed above US$50mln as a result of the dip.

A late-session rebound managed to pull the pair above 28k by the end of the day, where it has managed to stay this Tuesday morning, albeit only just.

Though a bad way to start the new month, bitcoin has managed to end in the green for the past three months, a pretty rare occurrence for the world’s largest cryptocurrency.

Bitcoin price chart
Bitcoin (BTC) takes a hit – Source:

This week could be a defining moment for bitcoin, with European Union inflation data due later today followed by the US Federal Reserve interest rate decision tomorrow, plus a slew of other key economic data reads throughout the week.

Investors will be eager to get a firm grasp of the current economic conditions before attempting either a push above 30k or a move lower.

Buyers seem willing to pitch in at US$27,500, according to the Binance order book, though any sign of overbearing hawkishness from the central banks is likely to test the resolve of the bitcoin bulls at this point.

Shoots of ETH green

Ethereum (ETH) was slightly less affected by yesterday’s volatile trading session, having dipped 2% to close at US$1,830 on the ETH/USDT pair, chalking up around US$22mln in Long-ETH liquidations.

This morning we have seen a touch of green, as ETH inched higher to US$1,835 in the Asia trading session.

Bullish support is pitched at the 1.8k price point, though as stated above, a hawkish surprise could definitely test the ETH bulls’ resilience.

In the altcoin space, none of the blue chips bucked the trend, with Ripple (XRP), Cardano (ADA), Polygon (MATIS), Solana (SOL) and the like chalking up low-to-mid single-digit losses throughout the Monday session.

Global cryptocurrency market capitalisation currently stands at US$1.16tn, having dipped 1.5% overnight, while total value locked in the decentralised finance (DeFi) space fell 2.5% to US$47.9bn.

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