Bitcoin Pauses Amid Crypto Banking Troubles. Analysts view “Death Cross” cautiously.
Bitcoin
and other cryptocurrencies were little changed on Monday, staying lower from recent levels on concerns that pressure on crypto-focused banks could affect markets.
The price of Bitcoin has traded almost flat over the past 24 hours to below $22,400. The largest digital asset is holding on to its lowest levels since early February, having hovered between $23,000 and $25,000 for much of the past month before dropped to the $22,000 zone late last week amid negative news surrounding crypto-focused banks.
Increasing regulatory scrutiny and revelations about a financial crisis at Silvergate Capital (ticker: SI ), an influential banker to the digital asset industry, have proven to be catalysts for the latest decline. Problems at Silvergate and the prospect of regulators cracking down on banks in the area have raised fears that crypto companies could struggle to access banking services in the US in what could prove to be a fresh headwind for the token markets.
Bitcoin is likely to take cues from
Dow Jones Industrial Average
and
S&P 500
over the next week or so, with congressional testimony from Federal Reserve Chairman Jerome Powell on Tuesday and Wednesday, the monthly US jobs report on Friday, and US inflation data next week in print.
But the technical picture for crypto seems to be weakening.
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“While Bitcoin/US Dollar has held its ground under furious selling attacks, it is in no rush to bounce back from the bottom,” said Alex Kuptsikevich, an analyst at broker FxPro.
“Technically, the 50-week moving average continues to act as a valid resistance from which selling is intensifying,” Kuptsikevich added. “The death cross formed on the weekly timeframe provides a cautious view on the near-term outlook and holds the potential for a return to the $16,300 to $18,000 level.”
In fact, analysts look warily at a “death cross,” which refers to a phenomenon in technical market analysis where a chart shows the 50-day moving average price of an asset falling below its 200-day moving average — a gloomy sign. Despite showing a death cross on the chart, Bitcoin remains relatively stable, at least for now.
Beyond Bitcoin,
Ether
—the second biggest crypto loss less than 1% to below $1,575. Smaller cryptos or altcoins were weaker, with both
Cardano
and
Polygon
down 2%. Memecoins showed similar action, with
Dogecoin
and
Shiba Inu
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each departure 2%.
Write to Jack Denton at [email protected]
