Key Highlights:
- Bitcoin’s price has stabilized following encouraging earnings reports from US regional banks, alleviating concerns over credit issues.
- An analyst suggests that Bitcoin’s current bullish trend may conclude in the next ten days.
On Friday, Bitcoin (BTC) experienced a drop of more than 5%, trading below $105,000. This drop marked a two-day decline spurred by ongoing stress in the US banking sector, raising worries about overall financial stability. Yet, amidst this turmoil, many US banking stocks showed recovery as global market sentiment shifted positively ahead of market opening.
Bitcoin one-day chart. Source: Cointelegraph/TradingView
Despite the drop, Bitcoin has struggled to maintain a value near $105,000, even in the wake of improved risk appetite after several regional banks, such as Truist Financial, Regions Financial, and Fifth Third Bancorp, reported better-than-expected earnings, which alleviated fears of a broader credit crisis.
The shift in the market mood paralleled the performance of key regional banks that reported lighter provisions for credit losses than expected, bringing relief after a disappointing previous day, when the S&P Regional Banks Select Industry Index fell by 6.3%, primarily led by Zions Bancorporation and Western Alliance Bancorp, both of which revealed loan losses due to fraud related to distressed commercial mortgage funds.
In European markets, banks like Barclays and Deutsche Bank also saw reductions in earlier losses, while Asian financial institutions including Mizuho Financial and Sumitomo Mitsui stabilized following significant sell-offs.
According to RBC Capital Markets, regional banks “remain well reserved for potential losses” and have built up capital since 2023, indicating that the recent market downdraft might have been exaggerated.
Trump’s Comments on Tariffs Create a Sense of Hope
Additionally, US President Donald Trump indicated that high tariffs on Chinese imports “will not last,” and mentioned plans for a summit with the Chinese President Xi Jinping in two weeks. This announcement, following China’s readiness to engage on trade conflicts, led to a rally in global markets, with US stock futures climbing by 1.2%.
BREAKING: S&P 500 futures recover losses as President Trump states that high tariffs on China will not endure.
Market analysts have noted a significant easing in risk sentiment. Cointelegraph reported earlier this week that the recent pullbacks in both cryptocurrencies and equities “do not signify long-term fundamental issues,” suggesting the market is undergoing short-term volatility rather than facing systemic risk.
Nonetheless, some experts warn that Bitcoin’s ongoing bull cycle may be approaching its conclusion. Analyst CryptoBird remarked in a post that the Bitcoin “bull run ends in 10 days,” a prediction based on historic cycle analyses.
This article does not provide financial advice or recommendations. Investment decisions carry risks, and readers should conduct their own research.
