Bitcoin (BTC) may have been less exciting than expected this week. However, the price was briefly volatile yesterday, shooting from $29,000 to a peak of $29,450 in the morning before plummeting all the way back to $28,700. Last night, bitcoin recovered and broke through the $29,000 mark again. At the time of writing, the price comes in at $29,095 on Binance and $26,380 on Bitvavo.
This means that the bitcoin price is just 0.1% up today. Trading volume fell 13% in the last 24 hours. The total market capitalization is $564 billion and the dominance is 47.2%. The Fear & Greed Index comes out at 61 (Greed).
Bitcoin Fear and Greed Index is 61 — Greed
Current price: $28,842 pic.twitter.com/JkSJExUCtp— Bitcoin Fear and Greed Index (@BitcoinFear) May 5, 2023
Macroeconomic data: interest rate, unemployment
Around the time of the price drop, the European Central Bank (ECB) announced an interest rate hike of 0.25% yesterday, as expected. However, it is hard to say whether this accelerated bitcoin’s decline.
⚠️BREAKING:
*ECB RAISES KEY INTEREST RATE BY 0.25% TO 3.75%, HIGHEST SINCE OCTOBER 2008
🇪🇺🇪🇺 pic.twitter.com/s8XYl8iTah
— Investing.com (@Investingcom) May 4, 2023
In the US yesterday the so-called initial jobless claims published. This measures the number of people who applied for unemployment insurance for the first time last week. These came in lower than expected and that, together with the ECB interest rate increase, was positive for the dollar, albeit short-lived. Still, this may have briefly pushed bitcoin down.
Unemployment Insurance Weekly Claims
Initial claims were 242,000 for the week ending 4/29 (+13,000).
Insured unemployment was 1,805,000 for the week ending 4/22 (-38,000).https://t.co/ys7Eg5LKAW
— U.S. Department of Labor (@USDOL) May 4, 2023
More important macroeconomic data may follow later today. The unemployment figures are particularly important to keep an eye on. The unemployment rate measures the percentage of the U.S. population that was unemployed last month.
Macro Releases – Friday, May 5 🗓️
🇺🇸 Nonfarm Payrolls (Apr)
🇺🇸 Average Hourly Earnings (YoY) (YoY) (Apr)
🇺🇸 Average Hourly Earnings (MoM) (Apr)
🇺🇸 Unemployment Rate (Apr)
🇺🇸 Participation Rate (Apr)$MACRO #NFP $SPY— BACH (@MortensenBach) May 5, 2023
Another US bank in trouble
Meanwhile, the banking crisis continues to worsen, despite Federal Reserve Chairman Jerome Powell saying this week that the US banking system is “sound and resilient.”
Earlier this week, Pacwest Bancorp turned out to be in trouble, and now Western Alliance Bancorp is also in trouble. There are rumors that the bank is considering selling, but the bank itself denies that.
Oh my. There were signs with $WAL. https://t.co/C5pALzyAxa pic.twitter.com/eozq07hHe8
— Markets & Mayhem (@Mayhem4Markets) May 4, 2023
Bitcoin liquidity and spot volume
As we wrote earlier this week, liquidity for bitcoin is very low and continues to decline. According to CCData, the so-called market depth is as low as it was in May 2022, shortly before the crash, Barchart reports.
Bitcoin liquidity continues to decline. At the end of last month, it would have taken an order of just 462 $BTC to move the asset’s price by at least 1% in either direction according to CCData. That would be the lowest market depth for BTC-USDT since May 2022 when crypto tanked. pic.twitter.com/UbifRRa68D
— Barchart (@Barchart) May 4, 2023
Spot trading volume also decreased by almost 70% last month, reports analyst James V. Straten.
Spot-traded volume #Bitcoin decreased nearly 70% in April pic.twitter.com/QvhPFKVmnZ
— James V. Streets (@jimmyvs24) May 5, 2023
Gold hits new record
Not only bitcoin, but also gold is enjoying the banking crisis. The gold price made a significant increase this week and even reached a new one yesterday all time high around $2,080 each troy ounce. Central banks will buy a record amount of gold in 2023, analyst Krishan Gopaul reports.
Central bank #gold demand made a record-breaking start to 2023. Net buying totaled 228t in Q1, 34% higher than the previous Q1 record set in 2013. pic.twitter.com/1OPmfZvq6U
— Krishan Gopaul (@KrishanGopaul) May 5, 2023
What makes investing in gold even more attractive at the moment is the fact that GoldRepublic gives new users a nice gift: 1 gram of gold worth about 60 euros! If you now create an account at GoldRepublic and buy 100 euros worth of gold, silver or platinum, you will receive this gram of gold on your account.
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