Market Deep Dive: The market recovered WoW but remains volatile

The market recovered WoW but remains extremely volatile.

After moving between 27k and 28k over the weekend, BTC$ exploded 10% between Tuesday and Wednesday. Further banking scares on account of First Republic Bank and tech earnings likely fuelled this explosive move.

The FRC stock has dropped by more than 50% this week after the bank saw deposits fall by $100bn in the first quarter. After hours on Tuesday, Microsoft and Alphabet both beat earnings and revenue expectations.

Wednesday evening, there was a flash crash in the market. BTC$ and ETH$ dropped about 6% in an hour. rumours of the US Government and Mt. Gox wallets moving BTC circulated, but were later proven to be false. However, Jump Trading moving $23m worth of BTC to Binance was clearly seen on-chain, and added to the scare.

More positive earnings in the tech sector allowed for BTC to again regain its strength through Thursday to where it is currently hovering between 29k and 30k. Meta and Amazon followed suit by beating earnings. Large-cap tech firms beating earnings is certainly a sign of relief and will boost investor confidence among lingering recession fears.

On Thursday, US GDP for Q1 was released. The economy grew by 1.1% compared to the 2% estimate. This indicated a strong slowdown from 2.6% in the previous quarter. Core PCE price was 4.9% for the first quarter, expected was 3.7%. Next week, we the FOMC meeting will be held, where the Fed is expected to raise the interest rates by 25 bps one last time. Current data indicates a decelerating economy alongside sticky inflation. Comments made by Jerome Powell on the recent banking stress and inflation will indicate if the market is getting ahead of itself, as it is expecting rate cuts this summer.

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