Bitcoin Backpedals to $22,000 Amid Silvergate Concerns
Key on-chain moves offered resistance throughout the first week of March, dampening the enthusiasm of Bitcoin traders.
During the last week leading up to early February, Bitcoin (BTC) had traded at approximately $23,500.
Today, the largest cryptocurrency by market capitalization faces a retest of the $22,000 level, which will benefit the short sellers.
Bitcoin’s price has been fairly stable in recent weeks despite struggling to get past the $22K mark in recent months.
Bitcoin feels the pressure at the $22K level
Bitcoin’s price on Monday fell below a key support level around $22,200. At the time of writing, Bitcoin was trading at $22,360, down 4.54% in the past seven days, and with a market cap of $431.7 billion, data from crypto market tracker CoinMarketCap shows.
Source: CoinMarketCap
BTC fell almost 10% in the past two weeks, and down 4% in the past 30 days, data from Coingecko shows.
Source: Coingecko
Silvergate concerns grow
In recent days, Bitcoin has traded above $22,400, well within the narrow range it has occupied since last week, when traders sold $78 million worth of long bets amid concerns about Silvergate Capital.
Following the announcement of a 40% reduction in staff, the California-based company made a “risk-based” decision to discontinue the Exchange Network.
Silvergate said in a filing last week that recent developments, particularly the collapse of the FTX exchange and following regulatory action, had raised concerns about the bank’s capacity to “remain in business.”
Other companies, such as Coinbase and Paxos, cut ties with the bank in the days that followed.
Bitcoin and other cryptocurrencies were relatively unchanged on Monday, hovering below previous levels on concerns that restrictions on crypto-focused institutions could influence markets.
Bitcoin’s price traded sideways for most of the past week as the market continued to process Silvergate and braced for what is expected to be encouraging economic news from China this week.
BTC total market cap at $431.6 billion on the daily chart | Chart: TradingView.com
BTC forecast
Jeff Dorman, chief investment officer at investment firm Arca, wrote in a Monday newsletter that the stability of the cryptocurrency market in recent days suggests that last week’s price drop may have been the result of a single seller (or small group of sellers) rather than a market panic.
While BTC/USD has consolidated around $22,200, a break below $22,000 could trigger a more severe correction.
Meanwhile, some analysts continue to predict that BTC will reach $25,000 in the near term, with on-chain data indicating multiple reasons for price volatility at higher levels.
– Featured image from VICE
