Data from Cointelegraph Markets Pro and TradingView tracked a sudden mood swing for BTC/USD, which hit $29,242 on Bitstamp.
The pair sank to daily lows at the previous day’s Wall Street open as markets awaited the Federal Reserve’s decision on interest rates.
At the same time, more US regional bank stocks suffered, with the trend remaining as the Fed confirmed a much-anticipated 0.25% hike.
PacWest Bancorp, a lender, has announced it is considering a buyout, further pressuring the local bank sector as it ramps up its offerings, including bitcoin.
Gold hit new all-time highs as market commentators criticized the Fed’s approach and predicted an end to rate hikes altogether.
XAU/USD 1 Month Candlestick Chart. Source: TradingView
The biggest joke is that Jerome Powell says the banking system has improved and is healthy, stable and resilient. It’s the weakest it’s ever been and few other banks are collapsing after the market,” commented Michael van de Pop, founder and CEO of trading firm Eight.
“This was the last climb.”
Van de Pop referred to Fed Chair Jerome Powell’s comments on the local banking sector that accompanied the rate decision.
“Conditions in that region have improved broadly since early March, and the US banking system remains sound and resilient,” he said in a statement ahead of a subsequent press conference.
“We will continue to monitor the situation in the region. We are committed to learning the right lessons from this episode and will work to prevent incidents like this from happening again. ”
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Others, however, were not convinced.
Arthur Hayes, the former CEO of derivatives exchange Bitmex, has revealed that he is hunting local banks that have already failed. Markets, he argued, will depend on the next move by Powell or Treasury Secretary Janet Yellen.
“You don’t know what the trigger was that caused Yellen or Powell to cave in and bail everyone out. It’s all politics now, politics is more about power than rational decisions,” read part of one tweet.
Financial commentator Tedtalksmacro also noted that the Fed funds rate is now at the highest level members expected.
A “major signal”
Turning to Bitcoin: A retracement of $29,000 provided a much-needed bullish counterpoint to recent price action.
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Changes in Binance’s order book, monitoring resource material indicators, showed that whale buying power gained the upper hand on news events.
“After removing most of the liquidity in the range before the FOMC FED rate hike announcement, BTC whales had no problem eating through the remaining liquidity and recovered $29k,” it summarized.
BTC/USD Order Book Data (Binance). Source: Material Indicators/ Twitter
Market participants expected further liquidity crunch to come next, fueling a trip above the $30,000 barrier.
“Although gold is attacking ATHs, Bitcoin continues to outperform,” Checkmate, lead on-chain analyst at Glassnode, called gold’s new highs a “significant signal.”
A tweet including Glassnode data shows an increase in BTC/XAU since the start of 2020.