Bitcoin falls below $28K as JPMorgan takes over Republic Bank
- Bitcoin registers a significant decline amid the takeover of First Republic Bank by JPMorgan.
- However, one analyst believes that Bitcoin has several positive market indicators.
Bitcoin (BTC) has recorded a pullback from its recent $30K to reach $28K after falling 2 percent in the last 24 hours. According to analysts, the cryptocurrency currently has a bearish signal and could go as low as $27,015.00.
However, there could be a reversal that could see the asset go as high as $29,212.30 later today. The current mini-pullback has been linked to the rapid response to First Republic Bank’s implosion as JPMorgan wins an auction to buy its assets. According to Edward Moya, senior market analyst for currency Oanda, it is response indicates that the banking sector was well prepared to face such a crisis.
It looks like the US banking system has a playbook for dealing with the next banking crisis when it pops up, dampening the case for crypto.
Crypto investors await the FOMC decision
Crypto investors are still hoping for a quick recovery as they await the outcome of the Federal Open Market Committee (FOMC) monetary policy meeting, which begins today. Investors next move will be based on the decision to increase the interest as well as the margin. CME’s FedWatch tool believes there is a high chance of interest rates increasing by 25 basis points (bps) of more than 94 percent. In this case, the target range can increase to between 5 percent and 5.25 percent.
According to analysts at Bitcoin mining equipment and hosting provider Blockware Solutions, Bitcoin has strong resistance between $30,000 and $31,000. With this, it is safe to expect that the asset may continue its downward trend or conduct a rally depending on the decision of the FOMC policy.
After a breakout (BTC above ~$25,000), it’s important to pay attention to pullbacks to gauge remaining buying power. In this case, BTC flashed some pretty bullish signals as buyers quickly entered the 50-day [simple moving average].
While the asset is said to have registered an increase of 2.5 percent in April, regulations have been a major obstacle. It can be recalled that the crypto exchange Coinbase petitioned the Federal Court to order the US Securities and Exchange Commission to be clear on whether the existing securities law applies to digital assets. The regulatory uncertainties in the country have forced some crypto firms to move to the East where governments are embracing new technology.
Will Bitcoin Price Fall to $25,000 or Return to $31,000?
According to co-founder and CEO of research platform The Tie Joshua Frank, Bitcoin has several positive market indicators, including its market cap approaching June 2020 peaks.
I think a lot of institutions are excited about Bitcoin. I think the risk-off narrative is resonating right now. Just as it did in 2021.
However, the main challenge for the asset right now is liquidity, which is also the reason for the excess return.
Bitcoin is outperforming due to several reasons including market consolidation, low trading volume and banking uncertainty. In the short term, Bitcoin is more correlated to gold. However, the US regulatory environment is unenthusiastic and negative towards crypto, which contributes to low liquidity.
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The possibility of Bitcoin breaking the resistance level at $30k, or breaking the support level at $25k, depends on the FOMC’s decision.
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