Bitcoin (BTC<\/a>) headed toward $28,000 support after the May 1 Wall Street open as markets digested fresh United States banking jitters.<\/p>\n Data from Cointelegraph Markets Pro<\/a> and TradingView<\/a> showed BTC\/USD dropping to multi-day lows at the time of writing.<\/p>\n The pair continued a comedown that began after the weekly and monthly candle close, shedding over $1,000 since that time.<\/p>\n The start of the week saw a potential volatility catalyst during Asia trading as First Republic Bank was sold to JPMorgan Chase<\/a> by the U.S. government.<\/p>\n Amid suspicions over the legitimacy of the move, First Republic became the second-largest bank failure in U.S. history.<\/p>\n Bitcoin showed little interest in mimicking its reaction<\/a> to the start of the banking crisis in March, instead tracking lower despite warning signs that another lender might already be in trouble.<\/p>\n This came in the form of PacWest Bancorp, the stock of which, PACW, saw a 7% drop on the day to return to its lowest levels in a month.<\/p>\n For Marty Bent, founder of crypto media company TFTC, the behavior was \u201ceerily similar\u201d to First Republic. PACW was down nearly 60% year-to-date on the day, while FRC, now suspended indefinitely, had dived 97%.<\/p>\n Eerily similar to the First Republic chart before it went under. pic.twitter.com\/TPHl7VYJEf<\/a><\/p>\n \u2014 Marty Bent (@MartyBent) May 1, 2023<\/a><\/p><\/blockquote>\n Despite the turmoil and potential looming continuation, U.S. equities were calm at the open, leaving crypto markets on the more volatile end of the risk asset spectrum.<\/p>\n Reacting, traders considered the possibility of a comedown in advance of the Federal Reserve\u2019s decision on interest rates due on May 3.<\/p>\n Well, well, well #Bitcoin<\/a>.<\/p>\n Again we’re getting a correction going into FOMC? pic.twitter.com\/dg2tRL6Tlm<\/a><\/p>\n \u2014 Micha\u00ebl van de Poppe (@CryptoMichNL) May 1, 2023<\/a><\/p><\/blockquote>\n This was nonetheless already heavily priced in by markets, which anticipated a 0.25% hike as a near certainty despite the banking fragility. Data from CME Group\u2019s FedWatch Tool<\/a> measured the probability at 94% on the day.<\/p>\n One asset, meanwhile, showing keen strength to start the week was the U.S. dollar, with the U.S. Dollar Index (DXY) challenging its highest levels since mid-April.<\/p>\n Related:\u00a0Second-biggest US bank failure \u2014 5 things to know in Bitcoin this week<\/a><\/em><\/strong><\/p>\n \u201cHuge week coming up, particularly for the US dollar. Expect defensive positioning leading into Wednesday,\u201d financial commentator Tedtalksmacro wrote<\/a> in part of ananalysis.<\/p>\n He argued that markets should not \u201cexpect\u201d the Fed to hint at a pivot or freeze of rate hikes at this week\u2019s meeting, this in itself boosting the dollar and risk-off sentiment.<\/p>\n A prior thread flagged key correlations for observers, these including DXY versus BTC.<\/p>\n 12\/ To finish off the thread, here’s a few correlations to pay attention to:<\/p>\n – DXY + #Bitcoin<\/a> (risk-on or off) Typically DXY higher –> risk-off, but context matters (is it driven by a move in another currency?) pic.twitter.com\/5nZn2BxcfJ<\/a><\/p>\n \u2014 tedtalksmacro (@tedtalksmacro) May 1, 2023<\/a><\/p><\/blockquote>\n![](\"https:\/\/s3.cointelegraph.com\/uploads\/2023-05\/ac8fc5ca-08b2-4f8c-aa2b-1902899bece9.png\")
Suspicions mount over First Republic contagion<\/h2>\n
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Dollar strength faces \u201chuge week\u201d<\/h2>\n
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– DXY + US02y\/DE02y (leads DXY)
– DXY + equities (risk-on or off)<\/p>\n