Bitcoin, Ethereum, Dogecoin Plunge After Silvergate Flaws, But Here’s Why A Bounce May Be In The Cards

Bitcoin (CRYPTO: BTC) fell over 2% lower on Friday, in line with the S&P 500, which fell around 1.6% due to recently announced failures in both the banking industry and the crypto sector.

On Thursday, Silicon Valley-based SVB Finanskonsern’s attempt at fundraising and crypto banking Silvergate Capital Corp the announcement that it will shut down sent shockwaves through the general market and the crypto sector. Traders and investors fear the announcements could be just the tip of the iceberg of problems in the industry.

Stubborn inflation and high interest rates have put downward pressure on the banks, such as fewer deposits in the fourth quarter. The economic situation has drained liquidity from the banking industry, a problem that could spread if the central bank continues its hawkish policy much longer.

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Ethereum (CRYPTO: ETH) and Dogecoin (CRYPTO: DOGE) also reacted bearishly to the news, each trading over 1% lower. From a technical perspective, all three cryptos are likely to bounce over the next few days, due to signals that have developed on their charts.

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The Bitcoin Chart: Bitcoin began trading in a downtrend on February 21 and has made a consistent series of lower highs and lower lows. The crypto’s last low was formed on March 5 at $22,654, and the last confirmed lower low was printed at $21,988 two days before.

During Thursday’s 24-hour trading session, Bitcoin printed a bearish Marubozu candlestick, indicating that lower prices were likely in the cards for Friday. On Friday, lower prices came, but the crypto tried to bounce back from the low of the day.

  • If Bitcoin closes Friday’s session with a significantly lower wick, the crypto will hit a bullish hammer candlestick, which could indicate higher prices will come on Saturday. A bounce is also likely as Bitcoin’s Relative Strength Index (RSI) measures around 27%, placing the crypto in oversold territory.
  • Bullish traders want to see Bitcoin bounce because if the crypto continues lower, it will lose support at the 200-day simple moving average (SMA), which puts Bitcoin in bear territory.
  • Bitcoin has resistance above at $20,545 and $21,313 and support below at $19,915 and $18,385.

The Ethereum Chart: Like Bitcoin, Ethereum entered a downtrend but on February 16th and has made a series of lower lows and lower highs. In Ethereum’s case, the last low was formed on March 5 at $1,588 and the last confirmed lower low was printed at the $1,547 mark on March 3.

  • Like Bitcoin, Ethereum worked to print a hammer candlestick during Friday’s session, with the bottom of the hammer just above the 200-day SMA, indicating that a bounce could be on the horizon. Ethereum’s RSI has not quite reached official oversold territory, but is starting to curl higher, which is bullish in the short term.
  • Ethereum has resistance above at $1,564 and $1,717 and support below at $1,308 and $1,231.

The Dogecoin Chart: Unlike Bitcoin and Ethereum, which have entered downtrends recently, Dogecoin has been trading in that pattern since February 4th. Dogecoin’s last low was made on March 7th at $0.075 and the last confirmed lower low was formed at the $0.072 mark on Mars. 3.

  • Dogecoin also worked to hit a hammer candlestick during Friday’s 24-hour trading session, which could indicate a bounce is on the horizon. Dogecoin’s RSI measures in at 23%, indicating that the bounce could be strong when it comes.
  • Dogecoin has resistance above at 7 cents and $0.075 and support below at $0.065 and $0.057.

Read next: Short sellers who predicted FTX, Silvergate Capital collapse and short SVB Financial have a new bank target: ‘A Worldwide Money Laundering Story’

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