Bitcoin surges above US$29,000, Ether recovers US$1,900

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Bitcoin fell 0.13% from April 28 to May 5 to trade at US$29,197 as of 8 p.m. Friday in Hong Kong. The world’s largest cryptocurrency by market capitalization has been trading below $30,000 since April 19. Ether rose 0.82% over the week to hit $1,914, returning to a key support level.

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This week, the US Federal Reserve hiked rates by 25 basis points, taking interest rates from 5% to 5.25%, the highest since September 2007.

The European Central Bank also raised interest rates by 25 basis points to 3.25% on Thursday, its seventh consecutive rate hike and a further sign of tightening to come in its fight against inflation.

Market worries about a possible banking crisis returned after First Republic Bank announced about $100 billion in withdrawals last month, sending its stock price tumbling 45.4% last week. The bank went into receivership from the US Federal Deposit Insurance Corporation and was the second-largest bank failure in US history, before investment banking giant JPMorgan Chase failed. announces on Monday the purchase of the majority of the bankrupt bank’s assets.

Data from the past 50 days shows Bitcoin bouncing back on fear of banking crises, as well as gold, Nilesh Verma, crypto market analyst and founder of consultancy Crypto Granth, wrote in a Twitter response to Forkast. , adding that Bitcoin’s main support prices stand at US$26,500. -27,000 USD.

Problems with the global banking system could increase demand for bitcoin, as it is considered a safe-haven asset by some investors. Bitcoin prices have risen more than 46% since March 10, from US$19,669, when Silicon Valley Bank collapsed.

Adding to investor concerns, the administration of US President Joe Bidens is campaigning for a tax on crypto miners equal to 30% of the cost of the energy they use, citing negative fallout from the mining industry.

A 30% tax would increase the cost of operating miners, wrote Tom Wan, research analyst at 21.co, the parent company of 21Shares, an issuer of exchange-traded crypto products, in an email to Forkast. According to Glassnode, the current [Bitcoin] the cost of production is US$22,500. An additional cost would mean that miners would have to sell more Bitcoin than they mined in order to sustain the business.

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Mining pools with access to clean, cheap energy, or located outside of the United States, may be less impacted. However, since a large percentage of mining power resides in the United States, the tax could force mining companies to relocate to another country, Wan wrote.

The global crypto market capitalization stood at US$1.2 trillion as of 8 p.m. Hong Kong on Friday, down 0.83% from US$1.21 trillion a week ago, according to data from CoinMarketCap. Bitcoin’s US$545 billion market cap accounted for 47.17% of the market, while Ether’s US$230 billion accounted for 19.1%.

See Related Article: Crypto & NFT Market Update May 4th

The biggest winners: FLOKI & CSPR

The FLOKI token, a dog-themed memecoin, was the biggest gainer this week among the top 100 coins by market capitalization listed on CoinMarketCap, surging 42.4% to $0.00005199. The memecoin began its rally on Friday, the same day Binance announced it would list FLOKI and PEPE on the exchange.

Casper Networks proof-of-stake blockchain coin CSPR was the second biggest gainer this week, with a price increase of 10.58% to $0.06019. The coin began its rally last Friday, the same day Medha Parlikar, co-founder and chief technology officer of Casper Labs, spoke about making public blockchains safe for businesses, at the Consensus 2023 conference.

Next week: Investors await US CPI

Investors are anticipating the publication of the US consumer price index (CPI) for April, scheduled for May 10. The March report showed US inflation rose 5% on the year, after rising 6% in February and marking the ninth consecutive month with falling inflation.

The non-farm payroll employment figure in the United States in April was 253,000, above an estimate of 180,000. Unemployment in April was 3.4%, against an estimate of 3.6 %.

Chiliz, a blockchain company focused on Web3 products for the sports and entertainment industry, is also expected to publicly launch its new Layer-1 mainnet, also known as Sports Blockchain, on May 10. The new blockchain will be compatible with Ethereum Virtual Machine and aims to attract more developers and brands to rely on Chiliz.

Crypto Granths Verma expects upward crypto momentum next week.

We are witnessing this crossover for the 4th time in Bitcoin history. If we take Covid as an exception, this crossover gives major returns to the bulls and signals a bull market ahead, Verma wrote, adding that Bitcoin has strong support at US$25,000-27,000 and the chart remains bullish until further notice. to a weekly close below US$26,000.

21.cos Research Analyst Wan said Bitcoin needs a weekly close above US$32,000 to confirm an uptrend.

See Related Article: US Response to Crypto Is Like a Deer Caught in Headlights, Says Former CFTC Chairman

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