Bitcoin, Ether eye new move as stocks plummet on fresh bank fears
- Bitcoin (BTC) and Ethereum (ETH) prices rose nearly 2% respectively as stocks plunged.
- The S&P 500 was down 1.5% as two bank stocks plummeted.
- BTC and ETH gains saw altcoins in the top 10 cryptocurrencies by market cap up.
Bitcoin (BTC) price moved above $28,500 again on Tuesday, rising more than 2% in early morning trades during the US trading session. The upside was yet another attempt by Bitcoin bulls to establish a fresj footing in the key price range.
Elsewhere, the price of Ethereum (ETH) rose above $1,860 to hit a new 24-hour high as crypto spot markets climbed. The Ether token was 1.9% up at the time of writing, gains that were being mirrored across the top 10 cryptocurrencies by market cap list.
BTC and ETH have traded to year-to-date highs above $31,000 and $2,100 respectively.
Stocks tank on bank fears
US stocks opened lower on Tuesday as stock prices of another two US banks plunged amid the latest turmoil in the banking sector. The S&P 500 was down 1.5% while Nasdaq was shedding 1.3%.
After share prices of First Republic Bank fell in the lead up to its takeover by JPMorgan, Tuesday saw prices of Pacwest (PACW) and Western Alliance (WAL) stocks bleed massively.
At about 12:30 pm ET, the PACW and WAL share prices were down 26% and 20% respectively.
The two bank stocks had plummeted more than 30% earlier as investor concerns around the turbulence within the US banking system resurfaced following the losses that followed the collapse of Silicon Valley Bank.
Also on investors’ minds this week is the Fed’s meeting that kicked off on Tuesday. While the market has the anticipated 25bps interest rate hike baked in for after the FMC meeting, what the central bank says in relation to what next is seen as key.
Economist Mohamed A. El-Erian, commented on the market outlook, stating via a tweet:
“The roller coaster continues with, this time around, a 20 bps drop in the yield on 2-year Treasuries. With such a key market segment continuing to be in urgent need of stabilization, it remains to be seen if the Fed serves this function tomorrow or, instead, is again a source of volatility.”
Barry Knapp of Ironsides Macroeconomics says the Fed’s approach to the inflation question is fraught and dubious. The central bank has to consider what the market is telling it. He shared his views in an interview with CNBC’s Squawk Box.
"The whole 2% target is an absolute trap," says @barryknapp on the Fed's inflation target. "Trying to do the math on what's going to happen to credit and what that will mean for economic activity and inflation is a really fraught, dubious approach." pic.twitter.com/1HT9cx3ldJ
— Squawk Box (@SquawkCNBC) May 2, 2023