Bitcoin battles $20,000 as trader calls banking chaos ‘2008 all over again’
Bitcoin (BTC) struggled to regain $20,000 support at the March 10 Wall Street open as fears of contagion from Silicon Valley Bank (SVB) mounted.
Trader targets $18,000 BTC price
Data from Cointelegraph Markets Pro and TradingView tracked BTC/USD as it nursed fresh losses, hitting $19,569 on Bitstamp.
The pair had seen further downside ahead of the open as struggling SVB Financial saw a further 60% wiped off its share price.
In a move that mimicked crypto exchange banking partner Silvergate, SVB also began triggering ripple effects for non-US banks on the day.
For Cointelegraph contributor Michaël van de Poppe, founder and CEO of trading firm Eight, the writing was on the wall.
“First it was Silvergate, then Silicon Valley Bank and now First Republic Bank. All of them are falling massively in the markets. It’s 2008 all over again,” he in summary.
With that, US stocks started the March 10 session in the red as nervous traders waited to see the full extent of the SVB contagion.
“Both Silvergate and Silicon Valley apparently invested in low-yield Treasuries prior to the Fed’s tightening cycle … Treasuries that no one would want to buy now with ‘risk-free’ 5% Treasuries straight from the government,” part of comments from trader and analyst Scott Melker stated.
“They were forced to sell at a deep discount and take heavy losses. This further shakes market confidence, causes more withdrawals and leads to insolvency.”
Melker said the setup was a “slippy hill”.
In terms of BTC price action, Van de Poppe, meanwhile, saw levels as low as $18,000 for a potential long entry. Over $20,000, however, was now a short shot.
Commentators see the Fed’s pivot pressure increasing
A silver lining came in the form of market commentator Holger Zschaepitz described as “mixed” US jobs data, helping to ease fears of a significant policy shift by the Federal Reserve.
Related: Why Is Bitcoin Price Down Today?
“Traders now price 25bps Fed hike in March after today’s jobs data. Previously 50bps was priced in,” popular analyst account Tedtalksmacro added on Twitter too calls the data a “mixed bag.”
Data from CME Group FedWatch tool confirmed the change in market expectations for the upcoming meeting of the Federal Open Market Committee (FOMC) to be held on March 22.
For some, however, the extent of the SVB crisis was reason to believe that the Fed would have no choice but to abandon its monetary tightening and “pivot” to interest rate increases.
“SVB is dealing with a full run on the bank. The bad news is that this is going to accelerate very quickly into a systemic crisis,” crypto entrepreneur David Bailey reacted.
He added that “The good news is that the Fed will have no choice but to swing immediately or risk imploding the entire financial system.”
The views, thoughts and opinions expressed herein are those of the authors alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
