The price of the king of crypto assets is down today especially after the revelations about the Silvergate bank. But this is not the only reason for this decline. We look at the clouds hovering above the head of BTC!
BTC below $22,500!
The price of Bitcoin is in down more than 4% in the last 24 hours. As of this writing, the asset is trading at $22,350. This is the first attempt below $22,500 since mid-February. The rest of the market is also in the red.
BTC dump in last 24 hours (source: CoinMarketCap)
ETH has fallen by almost 4% in the last 24 hours and the total capitalization of the crypto market has fallen by almost 3.3% according to the specialized site CoinMarketCap.
This decline appears to be driven by concerns about the Silvergate bank and its liquidity concerns. The analyzes are shared regarding the continuation of the BTC. So what are the factors behind this fall in Bitcoin?
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Anxiety around the House Gate
The Silvergate case is the main concern of the day. Officially a banking partner of many of the most famous players in the crypto industry, they have begun to scale back or drop their partnerships with Silvergate, as it may be “less than well capitalized”.
It was the bank itself that spoke those words, in a filing with the US SEC this week, delay in its annual 10-K report. After this announcement, Coinbase announced that it was stop using silvergatefollowed soon after Crypto.com.
Circle, the issuer of the USDC, later said it was “sensitive to concerns about Silvergate” and that he was “end some services with them“.
This new episode comes after the year 2022 marked by the crash of Terra Luna but especially the bankruptcy of FTX, then the second largest exchange in the world. Shares in Silvergate Capital fell more than 60% after the announcements. Currently, Bitcoin still holding up well according to many observers.
BTC is not supported
For many traders, this BTC dump was only a matter of time. Indeed, BTC failed break through the main resistance at $25,000. The price has repeatedly failed this symbolic bar. Added to a lack of volumeso this decline comes as a surprise to some market watchers.
If we fail to reclaim $23,750 tonight, we’re going to dump it for CAPO👌 And move these shorts pic.twitter.com/pyclL0rlaM
— CryptoTony (@CryptoTony__) March 2, 2023
For some traders like Crypto Credible, the token level of $20,000 could be the next step for BTC. Almost key level serve as support if tested again.
Cascading liquidations
Another factor that could explain this sudden dumping, the Multiple liquidations of long positions. In fact, it seems that many traders were not prepared for this pullback and has been liquidated.
Liquidations of BTC on the rise (source: Coinglass)
According to data from Coinglass, liquidated long positions on BTC amounted to more than $72.9 million at the time of writing these lines. So, once again, these cascading liquidations of betting traders have increased Drive Bitcoin South.
It will be interesting to watch the coming days to see if Bitcoin will succeed stay above $22,000. As many analysts have pointed out, this first move could only start a more massive dump.
It will also be necessary to carefully monitor the macroeconomic context and in particular the performance of major US indices. In case the latter falls, it is a safe bet that the selling pressure on Bitcoin will increase significantly.
Source: CoinTelegraph
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