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Bitcoin dips below $105K but US banking stress eases

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Bitcoin Faces Resistance as Bearish Divergences Emerge
Bitcoin Faces Resistance as Bearish Divergences Emerge

The key takeaways

  • Bitcoin price stabilized after US regional banks posted stronger-than-expected earnings, easing credit fears.

  • Analysts predicted that Bitcoin bull market could be over in ten days.

BitcoinBTC() declined more than 5 percent to close below $105,000 Friday. This extended a 2-day slide as heightened US bank stress rattled markets for risk and renewed concerns about the stability of the broader economy. US bank stocks showed resilience on Friday and the global pre-market market sentiment was stable. 

Bitcoin chart for the day. Source: Cointelegraph/TradingView

However, BTC continued to struggle near $105,000, not benefiting from improved risk appetite after regional lenders delivered stronger-than-expected earnings, easing fears of a wider credit contagion.

After several major regional lenders such as Truist Financial, Regions Financial, and Fifth Third Bancorp announced lower provisions than expected for credit loss, the market’s sentiment began to shift. The results offered relief to markets following Thursday’s rout, when the S&P Regional Banks Select Industry Index fell 6.3%, led by Zions Bancorporation and Western Alliance Bancorp after both disclosed loan losses stemming from fraud in distressed commercial mortgage funds.

The upbeat earnings helped the S&P Regional Banks Index claw back losses, with Zions Bancorp rebounding over 6%, Truist Financial rising 2%, and Western Alliance up 1.6% in early trading. 

European banks, such as Barclays, Deutsche Bank and Mizuho Financial, have pared their losses after heavy trading. Asian lenders, like Sumitomo Mitsui and Mizuho Financial, also stabilized following heavy selling.

RBC Capital Markets has said regional banks are not a priority for RBC Capital Markets. “remain well reserved for potential losses” The recent stock market selloffs may have overdone it.

Related: How low will Bitcoin go? Regional US ‘bank stress’ pushes BTC toward $100K

Trump’s tariff remarks boost optimism

Trump has confirmed the steep tariffs on Chinese imports. “will not persist” Xi Jinping will be meeting with President Obama in just two weeks. After Beijing announced its willingness to work together on trade issues, the statement sparked an upswing in global markets. US stock futures rose 1.2%.

Market analysts said that the risk-taking mood had slowed down. Cointelegraph reported The latest cryptocurrency and equity market pullbacks were reported earlier in the week. “do not have long-term fundamental implications,” The market may be experiencing short-term volatility, but not systemic distress.

Some analysts however have a different view. caution Bitcoin’s bullish cycle could be coming to an end. CryptoBird stated in a X message that Bitcoin is nearing the end of its current bull cycle. “bull run ends in 10 days,” Forecasting based on historic cycle patterns.

Related: Bitcoin ‘bull run is over’, traders say, with 50% BTC price crash warning

This article contains no investment recommendations or advice. Each investment or trading decision involves some risk. Readers should do their own research before making any decisions.