Bitcoin Recovers $28,000 Amid Slightly Encouraging Tech Earnings, Liquidating Short Positions

Bitcoin (BTC) surged above $28,000 as investors seemed to react to slightly encouraging first-quarter earnings from tech giants Alphabet and Microsoft and the unwinding of a number of bitcoin short positions.

The largest cryptocurrency by market cap recently traded above $28,250, up 2.8% in the last 24 hours. BTC traded sideways for most of Tuesday before surging just before the US stock markets closed.

BTC’s late surge came as Google and Microsoft slightly beat analysts’ expectations and data from analytics firm Coinglass showed that around $11.3 million in BTC short positions had been liquidated as of 4:00 p.m. ET. These types of short squeezes have historically tended to accelerate price jumps.

Ether (ETH), the second largest cryptocurrency by market value, followed a similar pattern, rising 1.8% to around $1,869. ETH slipped as low as $1,804 on Tuesday morning, according to CoinDesk data.

Major stock indexes closed in the red on Tuesday afternoon, a day after the embattled First Republic Bank (FRC) said in its quarterly results that it had 100 billion in deposits. Both Silicon Valley and signature banks imploded last month. On Tuesday, shares of First Republic plummeted nearly 50%.

The S&P 500 and the tech-heavy Nasdaq Composite ended down 1.5% and 1.9%, respectively, while the Dow Jones Industrial Average (DJIA) was down 1% on the day.

In bond markets, the 2-year government bond yield fell 19 basis points to 3.94%, while the 10-year government bond yield fell about 11 basis points to 3.40%.

“This way into earnings season the outlook doesn’t look too bad and that should mean the Fed can stay on its tightening trajectory with the risks of a rate hike in June remaining on the table,” Edward Moya, Senior Market Analyst at Foreign exchange market maker Oanda wrote in a note Tuesday.

“Following this round of earnings and the recent Consumer Confidence report, everyone can agree personal consumption will be much weaker going forward,” Moya added.

In an email to CoinDesk, Stefan Rust, CEO of data aggregator Truflation, struck a bullish note, writing that the current macroeconomic uncertainties, including the ongoing monetary policy debate, have once again underscored crypto’s potential.

“This is the time for crypto to shine against all this adversity, regulation, compliance/obedience while the fiat world struggles with debt, banking concentration and this shift to a multi-polarized world with so much distrust of institutions and lack of leadership leadership of politicians,” Rust wrote.

He added, “If not now, crypto will just become another technology that provides rails for the legacy systems they want to subject to compliance, allowing incumbents to sustain and manage incremental transitions.”[It is] versus jumping into a new, modern age of financial innovation – transparent, accessible to all and without intermediaries.”

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