how far can they dive after today’s 4% drop?


The cryptocurrency market is in trouble this morning as Bitcoin (BTC) and Ethereum (ETH) experience a decline of more than 4% in their value. As these are the largest cryptos by market capitalization, this downward trend has many people wondering. how far can BTC and ETH go.

Bitcoin (BTC) prices saw a significant decline, falling more than 4% to $22,370 in recent hours. Likewise, Etheum, the second cryptocurrency, also fell more than 4%, showing at $1,565. This decrease has led to a loss of about 22 billion dollars compared to Bitcoin’s total market value, which currently stands at $430.9 billion.

Current Silvergate Bank fallout may be behind BTC’s steep drop in value, as they have increased the uncertainty surrounding the fiat activation and deactivation ramp. In addition, US authorities are seeking to further sever financial ties between cryptocurrency firms and FDIC-insured institutions, which is also seen as a significant factor in Bitcoin’s decline in value.

Bitcoin’s impairments were also bolstered by growing concerns about interest rate hikes. Global cryptocurrency markets have seen a decline due to a series of positive economic data in the United States, which indicates that the Federal Reserve may need to raise interest rates higher and for a longer duration.

As a result, crypto markets are massively in the red, fueling questions about the BTC price decline and its possible magnitude.

Silvergate Doubts Undermine Bitcoin

As mentioned earlier, the price of BTC saw a significant drop of 4% in recent hours, leading to a $22 billion drop in its market capitalization. The concern surrounding the bank Silvergate Capital, contributed to the fall in the price of Bitcoin.

Markus Thielen, head of research for digital asset exchange Matrixport, suggests that the recent drop in BTC prices is likely due to the controversy surrounding the Silvergate Bank 10-K Financial Report Delayed Filingas well as increased efforts by US regulators to limit relationships between banks and cryptocurrency firms.

Additionally, it should be noted that Silvergate Capital announced on Wednesday evening that the filing of its annual report would be delayed due to losses resulting from the collapse of FTX in November and regulatory investigations on various fronts.

As a result, Silvergate’s uncertain situation caused major partners to sever ties, and the bank itself has expressed concerns about its ability to continue operations. On top of that, cryptocurrency markets have rallied back to mid-February lows, which are currently serving as support levels.

However, the markets are still trading in a tight range that has consolidated over $1 trillion in the past six weeks.

Fed rate hike and downtrend

The cryptocurrency market should end this week on a negative note due to robust US economic data recently published, which have fueled speculation that the Federal Reserve could aggressively raise interest rates to fight persistent inflation.

Statistically, US jobless claims fell to 190,000 in the week ending Feb. 24, lower than market expectations of 195,000 and the 192,000 reported the previous week.

Although unit labor costs rose 1.6% to 3.6% from 1.1% in the previous quarter, non-farm productivity in the fourth quarter (Q4) fell to 1.7% from 3.0% in the previous quarter and 2.6% according to market expectations. Consequently, the higher likelihood of interest rate hikes tends to lower cryptocurrency values and is seen as another factor that has played an important role in the weakening of Bitcoin prices.

The US dollar loses ground

The U.S. dollar initially climbed on Thursday on positive data on jobless claims and other indicators suggesting labor costs were rising, fueling speculation that the Federal Reserve may need to raise wages. interest rate to fight inflation.

However, the gains were short-lived and lhe dollar fell from a record value over 2 and a half months against the yen on Friday morningputting it on track for its first weekly loss against major currencies since January.

The consequence, according to some experts, is that the weakness of the US dollar could help prevent a sharp decline in cryptocurrency prices.

The price of bitcoin

The current trading price of Bitcoin is $22,370, with a 24-hour trading volume of $26 billion. The technical outlook for the BTC/USD pair points to a violation of a symmetric triangle pattern at the $23,250 level, with a breakout exposing BTC price to the $22,046 support zone.

Below, a Further breakout of this level could drive BTC towards the $21,450 mark.

Bitcoin Price Chart – Source: Tradingview

The formation of a bearish engulfing candle suggests a strong selling bias. However, if the candles close above this level, there is potential for a bullish bounce, with a target of $22,800 or even highertowards the resistance level of $23,750.

The price of Ethereum

The current price of Ethereum (ETH) in the market is $1,565 and its 24-hour trading volume is $9 billion. In terms of technical analysis, the ETH/USD pair broke a symmetrical triangular pattern, indicating the potential for further selling until it hits $1,560.

Ethereum Price Chart – Source: Tradingview

If this level is exceeded, ETH may face a support level of $1,500 soon. On the upside, there is strong resistance around $1,620 or $1,680 which should prevent immediate and ample upsides.

Top 10 Alternatives to Bitcoin and Ethereum to Watch

Cryptonews Reviewed top 10 cryptocurrencies for 2023. If you are looking for a higher potential investment opportunity, there are many other projects worth considering.

Disclaimer: This linked article presents the views of crypto industry players and is not part of the editorial content of Cryptonews.com.

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Cryptocurrency Price Tracker – Source: Crypto news





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