After a week-long rise above $30,000, bitcoin (BTC) dipped below the symbolic threshold. According to CoinDesk, the largest cryptocurrency by market capitalisation was recently trading at about $29,400, down about 1.9% over the past 24 hours.
BTC dipped below $29,300 at one point as banking unrest subsided, treasury yields rose and investors shied away from riskier assets.
“Cryptos are losing some appeal as banking turmoil risks appear to be disappearing. Fed lending to banks continues to ease and earnings have not revealed any major strains with the early banks that have reported. Also dampening the appeal for crypto is the surge behind Treasury yields, which is dampening the appeal for most risky assets,” said Oanda Senior Analyst Edward Moya.
Moya noted that a number of major banks reported solid first-quarter earnings, including Wells Fargo and Citigroup, and that emergency lending is decreasing.
“The mid-and small banks are about to report and while we are about to see some serious deposit outflows, the focus is not on bank solvency, but on banking profitability,” Moya said.
Ether was recently changing hands at about $2,075, off the better part of a percentage point. The second-largest crypto in market value has yet to see many ill effects from the recent Ethereum Shanghai upgrade, the final step in the blockchain platform’s transformation from a proof-of-work to a more energy-efficient proof-of-stake protocol.
Other major cryptos were in the red, albeit lightly so. ARB, the token of the layer 2 Ethereum scaling protocol Arbitrum, and ADA, the native crypto of the Cardano blockchain, both recently declined about 3%. The CoinDesk Market Index, a measure of the crypto markets overall performance, was recently down 1.6%.
Equity markets inched upward as investors chewed over the encouraging bank earnings and the possibility that the US central bank might continue raising interest rates to tame inflation. In last month’s near banking meltdown, that prescription seemed less likely.
Meanwhile, the 10-year Treasury yield has increased for three straight days to 3.59%, while gold, which a week ago neared its all-time high, has edged downward to just above $2,000. Moya was wary about bitcoin’s near-future path forward.
“Bitcoin looks like it might be consolidating, possibly settling on a new range between the $26,500 and $31,000 region,” he said.
