Decentral Block Post

Bitcoin (BTC) headed toward $28,000 support after the May 1 Wall Street open as markets digested fresh United States banking jitters.

Suspicions mount over First Republic contagion

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD dropping to multi-day lows at the time of writing.

The pair continued a comedown that began after the weekly and monthly candle close, shedding over $1,000 since that time.

The start of the week saw a potential volatility catalyst during Asia trading as First Republic Bank was sold to JPMorgan Chase by the U.S. government.

Amid suspicions over the legitimacy of the move, First Republic became the second-largest bank failure in U.S. history.

JPMorgan Chase emerged as the winner in the auction to acquire the deposits and a “substantial majority of assets” of the troubled bank First Republic. This marked the failure of the third regional bank in the United States since March and laid open the vulnerabilities in the legacy banking system.

Meanwhile, Bitcoin (BTC) has risen for four consecutive months from January through April, a feat it last achieved in 2013. Will the recovery extend in May?

Historical data does not give a clear advantage either to the bulls or the bears in May. The performance is split right in the middle with five positive and five negative monthly closes in May, according to Coinglass data.

The recovery in Bitcoin is facing a stiff hurdle above $30,000, indicating that the bulls are wary of buying at higher levels. That could be because of the upcoming Fed’s meeting on May 2 and 3, which is known to cause an increase in short-term volatility.

What are the levels that the bulls need to defend on Bitcoin and select altcoins if they want to keep the chances alive for the continuation of the up-move? Let’s study the charts of the top-10 cryptocurrencies to find out.

Bitcoin (BTC) saw considerable volatility between April 25 and May 1, ranging between $27,200 and $30,000. From a trading perspective, the 10.5% move sounds alarming, resulting in $340 million in leveraged BTC futures contract liquidations.

However, from a broader angle, Bitcoin price is up 72% year-to-date in 2023, while the S&P 500 stock market index accumulated 9% gains.

BTC price climbs on weaker US dollar, banking crisis

Bitcoin’s bull run happened while the dollar strength index (DYX), which measures the U.S. currency against a basket of foreign exchanges, was nearing its lowest level in 12 months.

The indicator stands at 102, down from 105.3 eight weeks prior, as investors priced in higher odds of further interventions from the U.S. Treasury to contain the banking crisis.

On May 1, the California Department of Financial Protection and Innovation closed down First Republic Bank (FRB) and transferred control to the Federal Deposit Insurance Corporation (FDIC). The FDIC then entered into a purchase and assumption agreement with JPMorgan to protect depositors. FRB joined Silicon Valley Bank and Signature Bank to become the latest U.S. bank to collapse in 2023.