Bitcoin has caught a big bid in the last 40 minutes, rising to a high of $29,990 in a straight line after breaking $29,000.
The rally erases most of the losses from last week and puts it back to within striking distance of a 10-month high.
The catalyst for the reversal this week has been trouble at First Republic Bank, which appears to be in a death spiral. Shares are down another 13% after falling more than 45% yesterday on deposit outflows.
What’s less-compelling about this thesis at the moment is that bitcoin already rallied on banking trouble in March and that was ultimately contained. This time, the pain hasn’t spread significantly beyond First Republic as other regional banks reported much smaller deposit outflows.
Bitcoin could also be reacting to a potential Fed pivot. The implied odds of a hike next week are down to 80% from a near-certainty last week. Further out, hikes are also being priced out and two cuts are priced in before year end.
Bitcoin could also be pricing in a rebound in risk assets in light of strong tech earnings so far this week. There’s been a strong correlation between bitcoin and the Nasdaq. Following earnings late yesterday, shares of Microsoft are up 8% and Google up 0.7%.
There are also regulatory concerns hanging over bitcoin. Yesterday, Binance.US called off its $1.3 billion deal to buy assets from Voyager Digital citing a “hostile and uncertain regulatory climate.”
This article was written by Adam Button at www.forexlive.com. Source