Bitcoin slumps after its longest streak of monthly gains since 2021

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(Bloomberg) — Bitcoin retreated on Monday after climbing for four consecutive months through April in the longest winning streak since 2021.

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The token slid as much as 3.2% and was trading at $28,580 as of 12:28 p.m. Tokyo. Smaller coins such as Ether, Solana and Polkadot also retreated, as did an index of the top 100 digital assets.

Bitcoin rebounded 73% in 2023 from a year ago, the crypto rout came to a halt around the $30,000 level as traders await fresh catalysts. The rally was fueled by bets on a potential Federal Reserve pivot to looser monetary policy as well as arguments that the US banking crisis has eroded confidence in fiat currency.

First Republic Bank is at the center of the latest stage of banking woes in the United States. Regulators worked through the night to try to resolve the situation and uncertainty dampened the mood in global markets.

The market is very nervous as it waits to see what happens to First Republic Bank, said Adrian Przelozny, head of independent crypto exchange reserve. Bitcoin’s swing on Monday may just be volatility related to that, and some long positions were liquidated as the market fell a bit, which then exploded.

Bitcoin’s four-month winning streak to April is the longest since a six-month lead to March 2021. Over the past decade, Bitcoin’s four-month winning streaks have heralded an average increase of 260% over the next year, data compiled by Bloomberg Show.

Bitcoin and the broader crypto world remain exposed to a variety of risks, such as the US crackdown on the sector and the possibility that traders lower expectations that monetary policy will become less restrictive later this year.

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For now, the Fed is expected to raise interest rates another quarter of a percentage point on Wednesday to dampen inflation even as economic risks mount.

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