Analysis of the credit risk shock in the US banking industry: Is Bitcoin under pressure or a safe haven?
Key Points
Banking Crisis : On October 16, Zions Bank and Western Alliance Bank disclosed approximately $150 million in total losses from nonperforming loans related to borrower fraud, triggering a sharp drop in regional bank stocks. Market Impact : The KBW Regional Bank Index plummeted 6.3%, safe-haven gold reached a new high, and Bitcoin fell below $105,000. Bitcoin Performance: In the short term, it exhibited risky asset characteristics, falling alongside the stock market. However, historically, digital assets often perform as safe-haven assets in the aftermath of banking crises.
Banking crisis details
Core Events
Zions Bank (ZION) disclosed that its subsidiary, California Bank & Trust, had $60 million in commercial loans subject to "clear misrepresentations and contractual breaches" related to borrower fraud involving distressed commercial mortgage funds. The bank has decided to write off the full $50 million and initiate legal action to recover the funds.
Western Alliance Bank (WAL), which separately discloses exposure to the same or related borrowers, filed a lawsuit in August against Cantor Group V LLC, alleging fraud through false title policies that concealed prior liens and seeking to recover about $100 million .
Market impact scale
| bank | Direct losses | Stock price decline | Market impact |
|---|---|---|---|
| Zions Bank | $50 million write-off | -13.1% | Hit a 6-month low |
| Western Alliance | $100 million recovery | -10.8% | Erasing recent gains |
| Jefferies | Related exposure | -8-10% | Monthly drop of 25% |
| KBW Regional Bank Index | - | -6.3% | Biggest one-day drop since April |
Performance of global safe-haven assets
Traditional safe-haven assets surged
U.S. Treasury bonds : The 10-year yield plummeted from 4.05% to 3.95%, the lowest since April; the 2-year yield fell to 3.39%, a three-year low. Bond prices rose for three consecutive weeks as investors flocked to the safest assets.
Precious metals soared : gold broke through a new record of $4,378/oz (+3.1%), rising 8.5% for the week, the biggest gain since the collapse of Lehman Brothers in 2008; silver rose to $54.38/oz (+3.8%), breaking through the historical high in 1980.
Safe-haven currencies : The Japanese yen rose above 150 against the US dollar, the Swiss franc hit a 15-year high, and the US dollar index weakened by 0.8%.
Bitcoin Technical Analysis and Market Performance
Price trend analysis
Current Level : $104,926 (below the key moving average, down about 6% from the $111,500 high) Trend Status : Bearish momentum in the short and medium term, the price fell below the daily SMA200 ($107,000), confirming bearish control
| Timeframe | RSI levels | MACD Status | Key signals |
|---|---|---|---|
| 1 hour | 24.5 (deeply oversold) | Bear Market Spread (-330) | Close to the lower Bollinger Band support |
| 4 hours | 27.6 (oversold) | Depth negative value (-457) | ADX 45.2 confirms a strong bearish trend |
| Daily Line | 33.3 (nearly oversold) | Strong Bearish (-1,610) | Testing SMA200 support |
Support and resistance level analysis
| type | Price | strength | in accordance with |
|---|---|---|---|
| support | $105,000 | powerful | The lower bands of the Bollinger Bands on multiple time frames are converging. |
| support | $104,000 | middle | Extending downside targets, long liquidation gathers |
| resistance | $107,000 | powerful | Daily SMA200, short liquidation area |
| resistance | $110,000 | middle | 4H Bollinger Bands middle track, the biggest pain point position |
Derivatives market data
Futures sentiment : Open interest fell 1.77% to $71 billion, in line with the price drop (weak hands exited the market); funding rates were slightly positive but the amplitude was small, indicating balanced leverage.
Options Flows : Total open interest is $54.9 billion (-5.1%), with the biggest pain point around $111,000, with put options dominating near-term contracts.
Liquidation Risk : Total 24-hour liquidations of $370 million (83% long), confirming the cascading effect from the $111,500 high.
Social Sentiment and Market Narratives
Community Response Analysis
Short-term bearishness dominates : Users are disappointed with Bitcoin's performance during banking stress, highlighting its characteristics as a risk-on asset rather than a safe haven. The "digital gold" narrative is being questioned as Bitcoin's decline is in line with the stock market, while gold reaches new highs.
Expectations of institutional adoption : Optimism points to the potential for institutional entry, with BBVA launching Bitcoin buying and selling services for millions of European clients and JPMorgan setting a target price of $165,000. MicroStrategy's Bitcoin-backed stable income product has been hailed as a "Trojan Horse" to attract pension funds and sovereign capital.
Relevance controversy :
- Bearish view : Critics like Jesse Colombo point to Bitcoin's plunge vs. gold's surge as evidence of its speculative nature
- Bullish View : Anthony Pompliano believes geopolitical uncertainty should drive Bitcoin buying, not selling
- Neutral View : VanEck predicts Bitcoin could become a global reserve asset by 2050
Historical Comparison: Crypto Performance During Banking Stress Events
2023 SVB Crisis Comparison
Initial Reaction : Bitcoin initially plummeted 20% (from ~$22,000 to $17,500), sending USDC de-pegging to $0.87 and a 10-15% loss in total market capitalization.
Later Performance : However, BTC rebounded 50% to $28,000 within a few weeks, outperforming gold (+8%) and the stock market (S&P 500 -5%). Research shows that Bitcoin exhibits "partial safe-haven" properties during bank-specific stress.
Current divergence : The 2025 scenario shows similar initial risk asset behavior, but ETF inflows and institutional services suggest a potential future decline in correlation with traditional markets.
Conclusion and Outlook
Short-term Outlook : Bitcoin is currently acting as a risk-on asset, falling in tandem with the stock market amidst pressure in the banking sector. Technically, it appears to be deeply oversold. If support at $105,000 holds, it could trigger a technical rally towards resistance at $107,000.
Mid-term outlook : Historically, Bitcoin exhibits risk-on characteristics in the early stages of a banking crisis, but as trust in the traditional financial system declines, it often transitions to a digital safe-haven asset. Current institutional adoption trends (ETFs, banking services) may accelerate this shift.
Key observations :
- Will the key support of $105,000 be maintained?
- RSI divergence signal confirmation (price is making new low but RSI is moving higher)
- Exchange reserves further outflow (down 5.5% on the 30th)
- Traditional safe-haven assets continue to perform
The market is at a critical point where the characteristics of risky assets and safe-haven assets are transitioning. It will be under pressure in the short term but may benefit from the structural shift in the medium and long term due to the declining trust in the traditional banking system.