After failing at resistance around $25,000, Bitcoin (BTC) finally fell back heavily today. What are the possible reasons for this sudden drop? We see this together.
Bitcoin (BTC) corrects sharply
After a phenomenal month of January and a month of February of consolidation, the cryptocurrency market starts March in the red. The price of Bitcoin (BTC) fell 4.7% since the beginning of the day on March 3 and is trading for $22,300 at the time of this writing.
This fall was relatively brutal since it took place at 2 am and occurred in less than an hour. The price of the market’s main digital asset is now changing at a local low since February 14. The capitalization of the entire market fell by 3.8%, or approximately $45 billion.
Evolution of the price of the BTC/USD pair in 1 hour
From a macroeconomic point of view, the indicators are rather pessimistic for risky assets and more mainly the cryptocurrency market. Between the probability of a growing recession over the next 12 months and the inflation figures which are struggling to decrease, as mentioned by Vincent Ganne in his analysis of the day, Bitcoin has been doing quite well so far.
Such a correction was expected by many analysts and investors, explaining the profit taking in February. Nevertheless, it seems that an aggregate of news items has precipitated the fall of the crypto market.
👉 Find all of our technical analysis articles on Cryptoast
Take your investments to the next level with the analyzes of Vincent Ganne
Silvergate, FTX, an explosive cocktail
For many, the main reason for this fall comes from Silvergate. This banking institution, partner of many important players in the cryptocurrency industry, recently announced that she was going through some tough times.
Already in a tense situation, Silvergate unveiled that she would not be able to provide her Form 10-K to the Securities and Exchange Commission (SEC) within the time. Note that this document provides information on the financial health of the entity.
Chronology of the last 24 hours:
1. #Coinbase suspend payments via Silvergate
2. #Crypto․com suspends payments via #Silvergate
3. #FTX confirms 8.9 billion missing funds
4. The total market capitalization of #cryptocurrencies lose more than 50 billion pic.twitter.com/h304KH1qqv
— Giancarlo Cecco (@GiancarloCecco) March 3, 2023
In the space of just one day, shares of Silvergate Capital (SI), Silvergate’s parent company, fell nearly 60%. In the process, Crypto.com, Coinbase and other partners suspended their collaboration with Silvergate. It was this announcement that certainly precipitated the fall of Bitcoin.
Silvergate’s refusal to release its Form 10-K confirms the rumors circulating about his solvency and his involvement in the FTX affair. This directly threatens the main cryptocurrency exchange platforms that collaborated with the banking institution.
At the same time, the new CEO of FTX announced that he had finished reviewing the accounts. Of more than $11 billion owned by customers, about 8.9 billion have completely disappeared. A hole in the coffers that despairs investors still dreaming of a refund of the exchange.
👉 To go further: Doubt settles on Bitcoin (BTC)? – On-chain analysis
Take your investments to the next level with the analyzes of Prof Chaîne
Newsletter 🍞
Receive a summary of crypto news every Monday by email 👌
What you need to know about affiliate links. This page presents assets, products or services relating to investments. Some links in this article are affiliated. This means that if you buy a product or register on a site from this article, our partner pays us a commission. This allows us to continue to offer you original and useful content. There is no impact on you and you can even get a bonus by using our links.
Investments in cryptocurrencies are risky. Cryptoast is not responsible for the quality of the products or services presented on this page and could not be held responsible, directly or indirectly, for any damage or loss caused following the use of a good or service highlighted in this article. Investments related to crypto-assets are risky by nature, readers should do their own research before taking any action and only invest within the limits of their financial capabilities. This article does not constitute investment advice.
AMF recommendations. There is no guaranteed high return, a product with high return potential involves high risk. This risk-taking must be in line with your project, your investment horizon and your ability to lose part of this savings. Do not invest if you are not ready to lose all or part of your capital.
To go further, read our Financial Situation, Media Transparency and Legal Notices pages.
Journalist for Cryptoast, I strive to dissect every detail of the exciting world of cryptocurrencies and make it accessible and understandable to as many people as possible.
Lilian Aliaga
383 items
