Cryptocurrency prices inched higher over the past day following the U.S. Federal Reserve's latest interest rate increase, along with signs the hiking cycle might be coming to a close and continued pressure on U.S. banks.
Bitcoin was trading at $29,179 by 8:20 a.m. ET, up 2% over the past day, according to Binance data via TradingView. Ether gained 2.4% in the same period, trading above $1,900.
Crypto prices were buoyed overnight following the Fed's latest increase, while markets have also benefited from increased sentiment — but there are still concerns over U.S. banks.
"Banking relief after JP Morgan swallowed the First Republic Bank on Monday remained short-lived, SPDR's U.S. regional bank ETF was down by more than 6%," Swissquote's daily market update noted.
PacWest is the latest U.S. bank to come under pressure. Shares plunged over 50% after the bank said it was in talks with potential partners.
Matrixport noted in a report these banking issues continuously require "liquidity injections and guarantees from the government for any acquiring party."
The current earnings season saw U.S. companies resume stock buybacks. Matrixport's Head of Research Markus Thielen noted there are "expectations for $1 trillion in buybacks this year," which "will continue to be a general tailwind for stocks and risk assets."
Spot trading volume has declined recently, with bitcoin falling sharply last month after crypto exchange Binance ended its zero-fee program. However, "the path higher sees only limited resistance," Thielen said.
"Transactions on the Bitcoin network have reached new all-time highs as the number of active addresses on the Bitcoin network has remained strong, near 1 million addresses," he wrote. This has largely been due to an emergence of tokens on Bitcoin that are being heavily traded and interacted with.
Finally, Matrixport noted trading in memecoins shows sentiment returning to the crypto market. Despite most of these memecoins being "small and insignificant," their trading activity shows a change in sentiment, Thielen noted.
"It's tough to be bearish when Bitcoin breaks higher, buybacks support stocks, the Fed appears on hold, Bitcoin transaction data is positive, and the sentiment is turning more (irresponsibly) positive," the report concluded.
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