Bitcoin struck by a bolt from the blue… plunges in the 5% range amid U.S. regional bank risk

After last Friday's sharp drop and subsequent rebound, cryptocurrency prices fell again. As global markets froze at news of a surge in bad loans at U.S. regional banks, the crypto market was also hit directly.

According to Binance on the 17th, as of 5:10 p.m. that day Bitcoin was trading at 105,260 dollars, down 4.82% from 24 hours earlier. Ethereum, the crypto asset with the second-largest market capitalization, was trading at 3,750 dollars, down 6.32%.

Bitcoin had plunged to 104,953 dollars on the 10th, when U.S.-China trade tensions reignited. Afterwards the two countries issued conciliatory messages and it recovered to the 110,000-dollar range, but in today's trading it returned to the 100,000-dollar range. The crypto market effectively gave back the gains it had recovered since the leverage liquidation event on the 10th.

On the previous day in the New York market, some U.S. regional banks reported large volumes of bad loans and consequent losses. Zions Bancorp warned of a 60 million dollar loss due to loan defaults by some borrowers. Western Alliance also said it had identified false information from some borrowers. As a result, Zions Bancorp's stock fell 13.14% and Western Alliance fell 10.81%.

Although the two regional banks are classified as small- to mid-cap stocks on U.S. exchanges, they had a significant impact on market investor sentiment, which had been rising uneasily. After the news emerged, the New York market closed lower, and on the 17th Asian markets showed larger declines than the U.S., with Japan's Nikkei down 1.44% and the Shanghai Composite down 1.95%.

This deterioration in market sentiment is said to have struck the already precarious crypto market directly. The crypto investor sentiment score calculated by financial data firm Alternative was 22 on the 17th, entering the 'extreme fear' zone. That score had been 64 (greed) just a week earlier.

Reporter Jeon Beom-jin forward@hankyung.com