Bitcoin (BTC) has dropped to multi-day lows as it approaches $28,000 support after the May 1 Wall Street open. The decline comes as markets digest fresh United States banking jitters. Despite warnings that another lender might already be in trouble, Bitcoin has shown little interest in mimicking its reaction to the start of the banking crisis in March. The start of the week saw a potential volatility catalyst during Asia trading as First Republic Bank was sold to JPMorgan Chase by the U.S. government. First Republic became the second-largest bank failure in U.S. history, amid suspicions over the legitimacy of the move.

PacWest Bancorp, another U.S. bank, saw a 7% drop on the day to return to its lowest levels in a month. For Marty Bent, founder of crypto media company TFTC, the behavior was “eerily similar” to First Republic. 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.

Traders considered the possibility of a comedown in advance of the Federal Reserve’s decision on interest rates due on May 3, but this was already heavily priced in by markets, which anticipated a 0.25% hike as a near certainty. Despite the banking fragility, data from CME Group’s FedWatch Tool measured the probability at 94% on the day.

The U.S. dollar, on the other hand, showed keen strength to start the week, with the U.S. Dollar Index (DXY) challenging its highest levels since mid-April. Financial commentator Tedtalksmacro wrote in part of an analysis that markets should not “expect” the Fed to hint at a pivot or freeze of rate hikes at this week’s meeting, which in itself boosts the dollar and risk-off sentiment. A prior thread flagged key correlations for observers, these including DXY versus BTC.

In conclusion, despite fresh United States banking jitters, Bitcoin has continued to decline, dropping to multi-day lows as it approaches $28,000 support. The decline comes as U.S. equities remain calm at the open, leaving crypto markets on the more volatile end of the risk asset spectrum. Traders considered the possibility of a comedown in advance of the Federal Reserve’s decision on interest rates due on May 3, but this was already heavily priced in by markets. Meanwhile, the U.S. dollar showed keen strength to start the week, with the U.S. Dollar Index (DXY) challenging its highest levels since mid-April.

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