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Investing.com – The has largely accelerated its decline since late Thursday, with the cryptocurrency bottoming at $19,797 around 2am. This is the cryptocurrency’s first foray below the key $20,000 threshold since January 14.
At the time of writing, the is trying to rally above this major psychological level, currently at $20,100, down 7.5% since yesterday and almost 11% over a week.
Silvergate weighs on the morale of Bitcoin traders
Remember that Bitcoin is affected by several negative factors this week, starting with the setbacks of the crypto bank Silvergate, which made resounding announcements on Wednesday evening.
The company has indeed announced its intention to cease operations and voluntarily liquidate its subsidiary Silvergate Bank, a cryptocurrency-friendly lender, a week after the company said in a regulatory filing that it was at risk of to be “less than well capitalized”.
Silvergate shares thus fell over 42% during yesterday’s session, which seems to be the main factor behind Bitcoin’s slide. Recall that this scenario has already occurred last week when Silvergate announced the postponement of the delivery of its annual report to the SEC, which had caused a plunge of more than 57% of its action last Thursday, with the key a Bitcoin flash crash of 6% in less than an hour.
Apart from concerns related to Silvergate, Bitcoin and cryptocurrencies in general are also largely affected by macroeconomic considerations.
The macro context and the threat of stronger regulation also responsible for the fall of BTC
Recall that the hawkish testimony of Jerome Powell, the head of the Fed, before the US Congress this week led the market to make a rate hike of 0.50% its base scenario for the next FOMC meeting. of March 22.
Indeed, the currently shows that the market is pricing in a probability of around 64% for this outcome.
However, just as expectations of an end to the rate hike boosted Bitcoin at the start of the year, the prospect of seeing monetary tightening finally go further and last longer than expected naturally sends the cryptocurrency lower.
Finally, in the background, we will also note the increasingly insistent pressure from the SEC and governments in general on several parts of the cryptocurrency industry, which also maintains a ceiling above Bitcoin, the hostility from regulators to digital currencies no longer to be proven.
Separately, an explanatory document to the supplementary budget released on March 9 revealed that cryptocurrency miners in the United States could be subject to a 30% tax on electricity costs under a proposed Biden’s budget to “reduce mining activity”, which also weighed on sentiment in the crypto market.
Turning to Friday, the focus of traders around the world will be primarily on the February NFP US Job Creation report. Strong numbers could further boost the likelihood of a 50 bp rate hike at the next Fed meeting, which would weigh on Bitcoin.
Conversely, a disappointment could tip the balance in favor of a rate hike limited to 0.25%, which would be positive for cryptocurrencies.
Technical thresholds to watch in the short term on BTC/USD
Chart-wise, Bitcoin’s plunge last night gave rise to a fresh technical sell signal, as the crypto broke below its 100-day moving average, after breaking below a visible bullish trend line. since January 18 earlier this week.
If the break below the $20,000 threshold is confirmed, the 200-day moving average at $19,700, the $19,000 threshold, then the $18,000/$18,400 zone will be the next downside targets to consider.
On the upside, we would need to see a return above $23,000 for the BTC/USD profile to become more positive again, but many intermediate resistances will have to be crossed before that, starting with the 100-day MA broken yesterday and currently positioned at $20,260.