March 2023, The Distributed, Stanko Illiev and Md Ishtiaque Ahmed
Table Of Contents
The prices of many cryptocurrencies have weakened after Silvergate Capital’s viability warning fueled fears of a domino effect, while ongoing concerns over the Federal Reserve’s policy path have also had a negative influence. The price of Bitcoin fell to as low as $22.248 on Friday (on some exchanges, Bitcoin reached even $22,000), while the price of Ethereum also showed negative sentiment and reached levels not seen since Feb. 14, 2023.
The popular crypto-friendly financial institution Silvergate Capital bank announced on Thursday that it couldn’t file its financial reports due this month and that it’s experiencing operational issues. Not long after that, Coinbase, Bitstamp, and Crypto.com took it to publicly sever their relationships with the bank. Investors continue to watch if this will have further contagion effects on the market or if the worst has already passed.
See Related: Silvergate Drops Over 50% In A Trading Day; Sees Its Biggest Clients Halting Business With The Bank
Markus Thielen, head of research at crypto services firm Matrixport, said that Silvergate Capital is probably facing more class action lawsuits due to lapses in its due diligence, which “should’ve become aware that the interlinked Alameda ( the company of FTX cryptocurrency exchange) and North Dimension accounts were used for fiat on-and-off ramp without being properly licensed.” Craig Erlam, a senior market analyst at OANDA, also said that the negative situation around Silvergate brings risks of further negative effects in the cryptocurrency industry. Erlam added:
“This story is a reminder that there could still be more to come, and it has undermined confidence in the space. Additionally, strong economic data this week suggest that the Federal Reserve could resort to further tightening, which also dented risk sentiment.”
Many crypto firms could experience operational issues and liquidity problems, and as they look to pay back creditors, they may liquidate their crypto assets, which could trigger other sell-offs in the crypto market. At the same time, increasing regulatory pressure caused by recent negative events could add further pressure on Bitcoin and Ethereum.
Technical Analysis of Bitcoin (BTC)
Key Findings: BTC Technical Analysis
- Bitcoin price breaks below the current trendline support following the current bearish momentum.
- The bearish crossover between 6 & 21 EMA suggests a possible downtrend ahead.
- RSI value remains lower than 14 SMA and drops below 50.
- BTC may enter a long-term bearish trend if the price fails to hold above the immediate support near $21,500.
- The price must exceed the current resistance at $24,000 to revive the recent bullish momentum.
Bitcoin remains bearish following the rejection at $25,000. The price has recently rejected the immediate resistance at $24,000, plotting a lower high.
The price has already broken the trendline support and heading toward the current support at $21,500. Besides, the 8 EMA moved below the 21 EMA, indicating a bearish trend reversal.
A break below $21,500 may push the price to the psychological support at $20,000 and accelerate the current bearish momentum.
The Relative Strength Index (RSI) plotted a bearish crossover with the 14 SMA. Also, the indicator value dropped below 50, suggesting a downtrend.
If BTC can sustain above $21,500, the next challenge will be to exceed the resistance at $24,000 to rejoin the recent bullish rally.
Technical Analysis of Ethereum (ETH)
Key Findings: ETH Technical Analysis
- Ethereum remains under bearish momentum as the price fails to exceed $1,679.
- The price continues to hold below the 10 SMA, indicating a further bearish move.
- ETH may retest the immediate support near $1,500.
- Technically, Ethereum can hit a further downside target near $1,300 if it fails to sustain above the current support.
- For a bullish outlook: the upside target remains at $1,800 and $2,000.
Ethereum has weakened from $1,679 to $1,543 since Mar. 02, and the current price stands at $1,570. The price continues to stay below the 10-day moving average, indicating that the negative trend is still not over. The cryptocurrency market continues to face a trust crisis after the collapse of the FTX cryptocurrency exchange created unprecedented market turmoil that could last for several more quarters.
If buyers cannot restore the rate shortly, there are high chances to see a further decline to the support level at $1,500, and if the price breaks this level, we could see Ethereum at $1,300.00 or even below. The important resistance level for Ethereum stands at $1,800, and if the price advances above this level, the next target could be $1,900 or even $2,000.
