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Good morning. Here’s what’s happening:
Prices: Bitcoin made a late surge and regained its previous position above $28,000, while Ether also experienced a rally.
Insights: Will the crypto market recover? What can we expect in terms of regulations? These questions will be addressed during CoinDesk's annual Consensus conference, which spans three days and features industry leaders discussing key topics.
Prices
|
$28,360
+948.4 ▲ 3.5%
|
$1,870
+34.5 ▲ 1.9%
|
1,217
+27.5 ▲ 2.3%
|
|
S&P 500
4,071.63
−65.4 ▼ 1.6%
|
Gold
$2,008
+14.0 ▲ 0.7%
|
Nikkei 225
28,620.07
+26.5 ▲ 0.1%
|
BTC/ETH prices per CoinCryptoUs, as of 7 a.m. ET (11 a.m. UTC)
Bitcoin Surges, but Will the Rally Continue?
Following a five-day period of hovering below $28,000, bitcoin experienced an unexpected surge, pulling much of the remaining market up with it.
The top cryptocurrency by market capitalization recently traded above $28,300, reflecting a 3.7% increase over the past 24 hours. The catalysts behind the surge were difficult to identify. Bitcoin started to trend upwards within a day after First Republic Bank reported a loss of $100 billion in deposits during its first quarter earnings presentation on Monday, renewing concerns regarding the stability of the banking sector. Last month, cryptocurrencies saw a surge in value as a result of a series of regional banking collapses in the United States, with investors seeking safe-haven assets to preserve their value.
"With First Republic Bank looking like it could go under, I suspect the market is anticipating yet more liquidity injections to prop up what certainly seems to be an American banking sector that is still very much in the throes of crisis," Jake Boyle, director of Caleb & Brown, a retail crypto brokerage, wrote in an email to CoinDesk. "Bitcoin, as a result, is front-running these expectations. Cracks in the financial system are growing, even if relatively subtly at the moment, and it’s going to be incredibly difficult for the Fed to adhere to its tightening regime going forward."
Boyle added: "Bitcoin’s rally of late has more to do with liquidity injections and rising expectations that the Fed’s tightening will probably have to end fairly soon, or else even greater turbulence in the banking sector could ensue.”
According to data from analytics firm Coinglass, approximately $11.3 million worth of BTC short positions were liquidated since 4 p.m. Short squeezes have a history of accelerating price spikes.
Ether was trading at approximately $1,870, which reflected a 1.8% increase from the same time on Monday. Other leading cryptocurrencies also experienced gains, with SOL, the native token of the Solana blockchain, and ADA, the native cryptocurrency of the Cardano smart contracts platform, rising by more than 3% recently. The CoinDesk Market Index, a metric used to assess the overall performance of the cryptocurrency market, increased by 2.6%.
During early Asia trading, the Nikkei and Hang Seng indexes experienced minor declines. Meanwhile, the tech-heavy Nasdaq Composite in the United States saw a decrease of almost 2%, causing U.S. stocks to close down.
CoinDesk analyst Glenn Williams noted in his weekday column that at least two technical indicators were suggesting a forthcoming rebound in bitcoin. Williams noted that BTC's "recent decline accompanied an expected drop in momentum, but it also occurred in conjunction with a move towards the lower end of the Bollinger Band. Bollinger Bands plot an asset’s 20-day moving average, and calculate two standard deviations above and below the average. An asset’s price is expected to stay within two standard deviations of the average 98% of the time, so a breach above or below is noteworthy.
Williams wrote that "bitcoin approaching the lower range of its Bollinger Bands raises questions about its near-term path, but he added that "given recent history, technical analysts could expect BTC prices to advance, albeit methodically, back to their 20-day average."
| Asset | Ticker | Returns | DACS Sector |
|---|---|---|---|
| Avalanche | AVAX | +4.4% | Smart Contract Platform |
| Cardano | ADA | +3.7% | Smart Contract Platform |
| Bitcoin | BTC | +3.5% | Currency |
Insights
What to Expect at Consensus
Despite facing significant challenges last year, the crypto industry is gearing up for its first major public appearance of 2023 at CoinDesk's annual conference, Consensus. The event, taking place this week in Austin, Texas, will bring together some of the most prominent figures from the worlds of crypto, government, Web3 and beyond to discuss the industry's current state, reflect on the difficulties of the past year, and speculate on what the future may hold.
In this regard, there are positive signs on the horizon. Based on the first four months of the year, it appears that the industry is heading towards a phase of reconstruction and growth.
The regulatory landscape for crypto in the United States has shifted from one of uncertainty to one of impending regulation. Following the European Union's lead, which recently passed the groundbreaking omnibus MiCA regulations, the industry is moving towards a more regulated environment. Even in China, which had previously banned crypto in 2019, there are indications of a growing interest in Web3 technologies.
Although recent market developments have provided some reasons for optimism, there is still much work to be done in terms of construction, policy-making, education, and investment. Unfortunately, fraud and contagion have severely damaged consumer confidence in the industry, making it challenging to rebuild trust. Nevertheless, this presents an opportunity for today's builders, regulators, and decision-makers, many of whom will be sharing their perspectives at Consensus.
Here’s what to expect this week in Austin.
Important events
2:00 p.m. HKT/SGT(6:00 UTC) Gfk Consumer Confidence Survey(May)
4:00 p.m. HKT/SGT(8:00 UTC) Switzerland ZEW Survey – Expectations (April)
Source Coidesk
