Bitcoin regains $28K amid mildly encouraging tech earnings, liquidation of short positions
Bitcoin (BTC) climbed above $28,000 as investors appeared to respond to mildly encouraging first-quarter earnings from tech giants Google parent Alphabet and Microsoft and the unwinding of a number of bitcoin short positions.
The largest cryptocurrency by market cap recently traded above $28,250, up 2.8% in the last 24 hours. BTC had been trading sideways for most of Tuesday before rallying briefly around the time US stock markets closed.
BTC’s late surge came as Google parent Alphabet and Microsoft both slightly beat analysts’ expectations, and data from research firm Coinglass showed that about $11.3 million in BTC short positions had been liquidated since 4 p.m. ET. These types of short squeezes have historically tended to accelerate price jumps.
Ether (ETH), the second-largest cryptocurrency by market capitalization, followed a similar pattern, rising 1.8% to change hands at around $1,869. ETH tumbled as low as $1,804 on Tuesday morning, according to CoinDesk data.
Major stock indexes closed in the red on Tuesday afternoon a day after embattled First Republic Bank (FRC) said in its quarterly results that it had lost $100 billion in deposits, renewing fears for regional banks. Last month, both Silicon Valley and Signature banks imploded. On Tuesday, First Republic’s shares fell nearly 50%.
The S&P 500 and tech-heavy Nasdaq Composite closed down 1.5% and 1.9%, while the Dow Jones Industrial Average (DJIA) was down 1% for the day.
In the bond markets, the yield on the two-year Treasury note fell 19 basis points to 3.94%, while the 10-year Treasury yield fell about 11 basis points to 3.40%.
“This far into the earnings season, it looks like the outlook isn’t too bad, and that should mean that [Federal Reserve] may remain on a tightening course with the risk of a June hike still on the table,” Edward Moya, senior market analyst at forex market maker Oanda, wrote in a Tuesday note.
“After this round of earnings and the latest consumer confidence report, one thing everyone can agree on is that personal spending is going to be much weaker going forward,” Moya added.
In an email to CoinDesk, Stefan Rust, CEO of data aggregator Truflation, struck an optimistic note, writing that current macroeconomic uncertainty, including the ongoing debate over monetary policy, has once again underscored crypto’s potential.
“This is the time for crypto to shine against all this adversity, regulation, compliance/obedience while the fiat world struggles with debt, bank concentration and this shift to a multi-polarized world with so much mistrust of institutions and a lack of guidance and leadership from politicians” , wrote Rust.
He added: “If not now, crypto will just become another technology that provides rails for the existing systems they want to be subject to compliance, so that incumbents can maintain and manage incremental transitions, versus leaping into a new modern age of financial innovation without intermediaries.”
