The main reasons why the crypto market could plunge this weekend!
The crypto markets have been on a rollercoaster ride since the beginning of 2023, when the price has fluctuated widely. The first two weeks witnessed a massive jump that increased the price by more than 40%.
After that, the bulls appeared to have drained heavily and the bears took back control and kept the markets under control, including a couple of pullbacks.
With the recent drop, it looked like the price would resume with a nice recovery, but several factors could keep the crypto space consolidated over the weekend.
It is well known that the crypto space reacts to external factors and waves and falls periodically. The global market capitalization fell more than 5.3% over the weekend as extreme selling pressure increased across the board.
However, the consolidated trend is believed to prevail as long as several events are right outside the crypto space.
Here’s why a jump could be on the cards this weekend:
Mt. Gox’s 142,000 BTC Unlock
Almost 142,000 BTC are set to be released this year, and creditors expect to finally receive their holdings. The repayments are set to begin on March 10, with the deadline set for September 10, 2023. A large number of creditors may hold all or part of their original BTC, but fears of liquidation continue to rise.
Ethereum Withdrawal Shanghai Upgrade
The Shanghai upgrade enables the validators to withdraw staked ETH from the Beacon chain. The upgrade was originally planned for March, but has now been delayed until April. While the upgrade is likely to be a bullish catalyst for the ETH stakes sector, it could generally create heightened selling pressure.
Silvergate collapse
Silvergate, a Californian bank that primarily deals in crypto transactions, operates the Silvergate Exchange Network (SEN), which enabled crypto exchanges to offer their users the ability to trade fiat currency.
However, it suffered the FTX collapse and suffered a loss of $1 billion. When exchanges pull support, it can have a reverse impact on the crypto space.
Macroeconomic shift
There has been a shift in the microeconomic data as the CPI and PPE results come in below expectations. The probability of a 50 bps hike in the next FOMC meeting is quite possible, as it currently stands at 26.2%. Therefore, the upcoming CPI data on March 13 could also have a profound impact on the crypto space.
Regulatory Crypto Clampdown
The crypto space is in the midst of the biggest crypto crash ever. The recent investigation into Kraken and Paxos highlighted the SEC’s newfound aggressive approach to regulation with a focus on staking products.
