Bitcoin (BTC) erased gains from earlier in the month on March 2 as fresh market uncertainty erupted over the solvency of crypto bank Silvergate.
Data from Cointelegraph Markets Pro and TradingView shows that the BTC/USD pair reached $23,206 on Bitstamp, down 1.5% on the day.
The pair came under pressure from rumors about the fate of Silvergate, which lost US exchange Coinbase as a client in a decision the latter said came out of an “abundance of caution.”
Silvergate had suffered in the aftermath of the FTX implosion, delaying its 10-K report this week and warning it may be “less than well capitalized.”
Shares of parent company Silvergate Capital are down 40% on the day to press time.
Coinbase also felt the pressure, with shares of Coinbase Global (COIN) shedding 9.65%, with the BTC price action itself, however, avoiding large drag losses.
“Silvergate could go bust, pushing prices a bit lower. On the other hand, people are accumulating positions since the news and there is no real movement in Bitcoin,” reacted Michaël van de Poppe, a Cointelegraph contributor and founder and CEO of trading firm Eight.
“This could be an assumption that people are very biased to the short side here. It’s time for a contraction.”
Popular trader and analyst Stack Hodler was of a similar opinion, suggesting that current events should not be reflected in Bitcoin itself.
“Coinbase, Silvergate, Bank of America and the Federal Reserve could implode overnight and it wouldn’t change the amount of Sat I have in cold storage”, said to Twitter followers.
“The beauty of having #Bitcoin without counterparty risk.”
However, by focusing on immediate price performance, others were in risk-off mode, looking to rally to higher levels before considering long positions.
keep it simple
4HR close / acceptance above 23.8K could re-ignite bullish momentum. Until then, I wouldn’t be looking at any local longs. pic.twitter.com/Yy1EiZ5vx1
—Crypto Chase (@Crypto_Chase) March 2, 2023
“Finding resistance in a logical place; I still think a visit to ltf support (green line) makes more sense on low time frames before we decide which direction to go”a forecast from Credible Crypto slightly more bullish along with a chart with target areas.
“I will also add that until/unless we break the lows of $21.373, I am leaning bullish (green path).”
Disappointing inflation reports for risky assets
Another point of concern was provided by the macroeconomic data for the day, which showed more persistent inflation than expected by the central banks.
Both in the United States and in the European Union there were not very encouraging reports, since in the first case unemployment did not get hot.
“Initial Jobless & Continuing Jobless Claims arrived colder than expected”, summarized Keith Alan, co-founder of monitoring resource Material Indicators, arguing that the Federal Reserve and Chairman Jerome Powell may now have an added incentive to keep interest rates rising, a key headwind for crypto and risk assets.
“This is the exact opposite of what the Fed wants to see in controlling inflation. In my opinion, this is going to strengthen JPow’s resolve to go higher for longer. Remember that Higher and Longer are on a sliding scale.”
According to CME Group’s FedWatch Tool, bets on a higher rate hike in March than in February stood at 32% after the jobless claims data.
The views, thoughts and opinions expressed herein are those of the authors alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
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