Ethereum Watch

• As JPMorgan swooped in to save troubled First Republic Bank, positive sentiment remained in the crypto market. 
• Positive funding rates and long liquidations marked the last 24 hours, indicating that investors expected assets’ prices to rally.

Global cryptocurrency market capitalization slipped by a mere 1.5% 24 hours after the U.S. Federal Deposit Insurance Corporation (FDIC) named American banking giant JPMorgan Chase as the buyer of troubled First Republic Bank, data from CoinGecko revealed. At press time, global cryptocurrency market capitalization was $1.21 trillion.

As reported earlier, First Republic Bank was closed down by the regulator due to customer withdrawals and declining asset prices. In an agreement with the FDIC, JPMorgan acquired the bank’s assets after rescue talks dragged on for weeks. This included loans, securities, and deposits totaling $295 billion.

Thanks to JPMorgan, unabated losses were kept at bay

When Silicon Valley Bank (SVB) collapsed unexpectedly in March, Bitcoin’s [BTC] funding rates turned negative for the first time since the year began. 

According to data from CryptoQuant, the negative sentiments that plagued the market prior to the decision by the U.S. Department of the Treasury, Federal Reserve, and FDIC to restore all customer deposits. As a result, the leading coin’s funding rates plummeted to levels similar to when FTX collapsed in November 2022.

With a regulatory lifeline offered by the FDIC in the wake of First Republic Bank’s failure, the cryptocurrency market reacted differently than when SVB failed.

Short liquidations marked the general crypto market during the weekend of SVB’s collapse. However, things have been remarkably different in the past 24 hours, wholly due to JPMorgan’s decision to acquire the assets of troubled First Republic Bank. 

How BTC, ETH, BNB reacted

Per data from Coinglass, 21,908 traders were liquidated in the general cryptocurrency market, with $61.99 million removed in the last 24 hours. According to the data provider, long liquidations exceeded short liquidations during the period under review. This indicated that positive sentiments remained in the market.

Further, on-chain data from Santiment revealed that during intraday trading on 1 May, Bitcoin, Ethereum [ETH], and Binance Coin [BNB] saw their trading volumes and daily active addresses count jump significantly. 

However, as investors rallied to book profits on their investments in the last 24 hours, the values of BTC, ETH, and BNB dropped by 1.69%, 0.93%, and 2.83% respectively. 

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