Bitcoin rises as concerns over First Republic Bank escalate
The price of bitcoin has jumped 4% today after the crisis hit First Republic Bank shares fall almost 50% as investors question its future.
The fall in First Republic Bank shares came a day after the US bank said customers had withdrawn more than $100bn (£80.25bn) from their accounts amid last month’s banking panic.
Following the collapse of Silicon Valley Bank (SIVB) in early March, and on concerns over other US mid-tier lenders, the entire cryptocurrency market capitalization surged, with bitcoin breaching $30,000 two weeks ago, marking the first time the digital asset reached this. level in 10 months.
Since last week, however, bitcoin’s price has retreated 9% after breaking the psychologically important $30,000 barrier, while ether’s price has fallen 14% after peaking above $2,100 in mid-April.
Read more: Crypto live prices
Support or resistance for both bitcoin and ether often concentrates around large whole numbers, and today the price of both digital assets has increased.
Bitcoin (BTC-USD) is moving back towards the $30k mark, gaining 4% in the last 24 hours to $28,400, and Ether (ETH-USD) has climbed 2.5% to $1,862.
According to Coingecko, the global cryptocurrency market capitalization today is $1.23tn, up 2.5% in the last 24 hours.
Bitcoin reaches $30,000 in line with the upper range of the Bollinger Bands, which plot an asset’s 20-day moving average and calculate two standard deviations above and below the mean.
Read more: Philip Hammond warns of “real risk” to London’s financial services from the EU’s crypto bill
Over the past 24 hours, the majority of leveraged trades liquidated in the crypto market were short positions as prices rallied after days of falling value.
According to data from Coinglass, 25,602 traders were liquidated in the last 24 hours, and 75% of them had short positions.
Problems arise among US mid-tier lenders
First Republic ( FRC ) shares fell nearly 50% in the past 24 hours as investors questioned its future after customers pulled out more than $100 billion in a banking panic, marking the bank as one of the most vulnerable to failure.
The bank is now pursuing strategic options, such as cutting costs by shedding 20% to 25% of its workforce.
The collapse of Silicon Valley Bank and New York’s Signature Bank ( SBNY ), along with problems at Credit Suisse ( CS ), have raised fears of a looming crisis in the banking sector.
Read more: Bitcoin could rise to $100k by 2024, says Standard Chartered, even as prices collapse
The US central bank’s monetary policy decisions over the past year have affected bond values. As interest rates rise, the market value of bonds already held by lenders, such as Silicon Valley Bank, has declined.
As spooked investors pull their money out of troubled banks, these lenders have been forced to sell their older bonds at a loss to fund customer redemptions.
See: Philip Hammond warns of ‘real risk’ to London’s financial services from EU crypto bill | Crypto Mile
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