Bitcoin falls with stocks as analyst warns of banking crisis ‘endgame’
Bitcoin (BTC) tumbled below $29,000 at the Wall Street open on May 4 as US stocks showed jitters over the resurgent banking crisis.
“Too much at once” for US banks
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD losing ground as the S&P 500 fell 0.7%.
The decline in risk assets came with more chaos for US regional bank stocks, with PacWest Bancorp once again in the lead, falling more than 50% on the day.
The struggling lender had already seen heavy losses and was down 86.5% year-to-date at the time of writing. In a statement, the bank nevertheless described its position as “solid”.
As Cointelegraph reported, assurances from US authorities about the stability of the banking system seemed at odds with reality for many commentators, with confusion only increasing as the crisis continued.
“For the first time in weeks, stock markets are reacting to the banking crisis,” financial commentary The Kobeissi Letter wrote in part of the Twitter coverage.
Kobeissi argued that the latest rate hike by the Federal Reserve, confirmed as 0.25% on May 3, had added fuel to the fire.
“Perhaps this is the stock market worrying that the crisis cannot be isolated,” it continued.
“The Fed rate hike only makes things worse.”
In addition to PacWest, First Horizon and Western Alliance were two other big losers on the day, down 53% and 38%, respectively.
“Trust in a financial institution is built over decades and destroyed in days,” Bill Ackman, CEO of hedge fund management firm Pershing Square, continued in his own answer.
“As each domino falls, the second weakest bank begins to wobble. Until investors are rewarded for betting on a faltering bank, there will be no bidding and the best sale is the last price. We are running out of time to fix this problem.”
In a dedicated blog post about the crisis, Marty Bent, founder of crypto media firm TFTC, described it as a point of no return.
“Everywhere you look, things look absolutely terrible for the US financial system. This feels like the end game,” he warned on May 3.
“I find it hard to believe that there is anything that can be done to restore confidence in the system. No amount of backstopping, money printing, buybacks, consolidation or world war will be able to put this genie back in the bottle. The Fed and Treasury will try their best to make the public believe otherwise, but this is simply too much at once.”
Weekly Chart Underlines $28,800 BTC Price Significance
As for Bitcoin, BTC/USD was in a low liquidity area at the time of writing, with high volume traders staying away.
Related: Bitcoin Miners Earned $50B From BTC Block Rewards, Fees Since 2010
Data from the Binance order book uploaded to Twitter by monitoring resource material indicators showed bid liquidity slowly increasing above $28,000.
As various popular traders demanded higher levels of return to be able to make a shot at $30,000 resistance, it remained bullish with longer duration.
Popular trader and analyst Rekt Capital highlighted current spot price levels as the site of an important recovery operation.
“Last week, BTC Weekly closed above ~$28800. And this week, $BTC has done quite well to hold it as support, largely due to the aggressive buying in recent days,” explained on weekly time frames.
“Reclaim of the $28800 level is technically underway.”
Blade: Unstable coins: Depegging, bank runs and other risks loom
This article does not contain investment advice or recommendations. All investment and trading moves involve risk and readers should conduct their own research when making a decision.
