The beginning of May has seen the failure of First Republic Bank, marking a volatile start to the week for macroeconomic events. Bitcoin has also faced downward pressure, with a flat monthly close leading to an increase in price volatility. The BTC/USD price dived lower, reaching $28,289 on Bitstamp, while other traders were waiting for $28,300 support to prove itself before taking a position. Some analysts have suggested that the “bounce” in the altcoin markets may indicate a potential return to strength.
Last month, First Republic Bank shares plummeted by 75%, and it has now been placed under public receivership by the U.S. Federal Deposit Insurance Corporation (FDIC). JPMorgan Chase has taken over, with the deal being announced later than expected. The forthcoming 0.25% interest rate hike, which is heavily priced into the markets, is still not guaranteed. Attention is focusing on the Fed, which risks unsettling the banking sector even more with a further rate hike. The FOMC event in itself may also mark a potential price turning point for Bitcoin traders.
Despite current cold feet over BTC price strength, April avoided receiving the title of the worst month of 2023, with overall returns for BTC/USD totaling 2.8%. However, the picture looks less appetizing on weekly timeframes, with consolidatory weekly candles underscoring the stubborn nature of $30,000 resistance. Some remain optimistic, with BTC weekly and monthly candle close being described as bullish.
On-chain activity tells a compelling story of Bitcoin growth during its 2023 comeback, with the daily transaction count approaching all-time highs after an “explosive” increase. While conviction remains high, the uptrend remains young, and on-chain volumes have not picked up in support yet. Analysts predict a choppy road, with traders having growing influence on low timeframes and liquidity.
Crypto market sentiment has been creeping higher after a drop in late April, with market “greed” trending back toward levels last seen at Bitcoin’s $69,000 all-time high in November 2021. However, this indicator shows the ease with which sentiment is currently being influenced by comparatively small market shifts. This highlights the importance of current resistance levels for Bitcoin and Ether, with both assets facing key lines in the sand of $30,000 and $2,000, respectively.
Forex traders must be aware of the macroeconomic events and bank failures affecting the market, as well as the potential impact of the Fed's decisions on interest rates. As Bitcoin continues to face price volatility, forex traders may also experience fluctuations in cryptocurrency markets. Forex traders who are interested in trading Bitcoin and other cryptocurrencies must keep an eye on on-chain transactions and market sentiment. Understanding the relationship between traditional financial markets and cryptocurrency markets can help forex traders make more informed decisions.