bitcoin has dropped almost 5%, falling to $22,200 in less than 20 minutes. This unexpected decline can be explained by a reason that does not seem to be what everyone thinks. Indeed, this crash occurred just a day after operational problems broke out at Silvergate Bank.
The real reason for the crash is elsewhere
Bitcoin (BTC) price dropped impressively a day after operational incidents revealed by Silvergate Bank. The drop in the price of BTC on the market took place in less than 20 minutes. One could logically think that these two events are linked.
That’s not what some analysts think. On the contrary, the two events happened far too quickly for there to be a correlation according to these same analysts.
For example, intraday trader and creator of trading systems named Skew spoke on Twitter about it. He gave an explanation of why Bitcoin crashed in the past few hours.
In his post, he wrote:
“What led to this move was a large Binance spot sell directly into a stacked longs area.”
If the trader’s theory is to be believed, it is not possible that the fall in Bitcoin price was the result of Silvergate Bank’s problems. Either way, the banking turmoil has caused a stir within the crypto industry.
Industry reacts to Silvergate Bank problems
On March 2, Silvergate Capital Corporation revealed that it faced several operational issues. The California-based cryptocurrency-oriented financial institution has admitted that it cannot submit its annual report due March 16.
The reason for this inability is that the financial company accuses the blow of the losses of 1 billion dollars recorded in the fourth quarter of 2022 following the FTX affair. She hinted that it will be difficult for her to continue the normal course of her activities.
This statement rocked the crypto industry. Several companies have terminated or suspended operations in connection with the financial institution.
This is the case of Coinbase, which took the floor to announce that the platform will no longer accept or initiate payments to or from Silvergate Bank.
Crypto businesses aren’t the only ones jumping ship in the wake of the financial firm’s statement. Many investors also reacted immediately after the announcement.
Coinglass has note an exponential increase in liquidations. The analysis company noted over $240 million in long and short position liquidations in the last 24 hours.
Recall that Silvergate’s actions have lost nearly 32% market value following the declaration.