Bitcoin sees liquidity above $30,000 as gold hits new all-time high
Bitcoin (BTC) regained $29,000 overnight on May 4 as the US banking crisis threatened to create new victims.
Gold, Bitcoin Benefit from US Banking Chaos
Data from Cointelegraph Markets Pro and TradingView tracked a quick shift in sentiment for BTC/USD, which hit $29,242 on Bitstamp.
The pair had dipped to daily lows at the opening of Wall Street the previous day, as markets awaited a decision on interest rates from the Federal Reserve.
At the same time, several US regional bank stocks suffered, the trend remaining as the Fed confirmed its long-awaited 0.25% hike.
One lender, PacWest Bancorp (PACW), then reportedly announced it was considering a buyout, putting further pressure on the regional banking sector while giving a boost to havens including Bitcoin.
Gold even hit new all-time highs as market commentators criticized the Fed’s approach and predicted the end of rate hikes altogether.
“The biggest joke is the fact that Jerome Powell says the banking system has improved and is healthy, sound and robust. It’s the weakest it’s ever been and a few more banks have fallen apart after the market,” Michaël van de Poppe, founder and CEO of the trading company Eight, reacted.
“This was the last trip.”
Van de Poppe referenced comments about the regional banking sector by Fed Chair Jerome Powell, which accompanied the interest rate decision.
“Conditions in that sector have generally improved since early March, and the US banking system is solid and robust,” he said in a statement before a subsequent news conference.
“We will continue to monitor conditions in this sector. We are committed to learning the right lesson from this episode and will work to prevent incidents like these from happening again.”
Others, however, were far from convinced.
Arthur Hayes, former CEO of derivatives exchange BitMEX, revealed that he was already hunting down failing regional banks. Markets, he argued, could hinge on the next move by either Powell or Treasury Secretary Janet Yellen.
“You never know what the trigger will be that makes Yellen or Powell swoop in and bail everyone out. Everything is politics now, and politics is more about power than rational decisions,” part of a tweet read.
Financial commentator Tedtalksmacro additionally noted that the Fed funds rate was now at the members’ own expected peak.
An “important signal”
As for Bitcoin itself, the retracement of $29,000 provided a much-needed bullish counterpoint to recent price action.
Related: BTC Price May Need a $24.4K Drop as Bitcoin Speculators Stay in Profit
After seeing changes in the Binance order book, monitoring resource material indicators showed that the buying power of the whales had gained the upper hand through the news events.
“After clearing most of the liquidity in the area before the announcement of the FOMC FED rate hike, the BTC whales had no problem eating through the remaining liquidity and retook $29,000,” the in summary.
Market participants thus hoped that further liquidity squeezes could come next, fueling a trip above the $30,000 barrier.
“Even as gold attacks ATHs, Bitcoin continues to outperform,” said Checkmate, lead chain analyst at Glassnode, after calling gold’s new highs an “important signal.”
A tweet including Glassnode data showed the rise in BTC/XAU since the start of 2020.
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This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
