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Market picture
Bitcoin plunged more than 6% to $22.0K early this morning. The plunge into this area came as a market reaction to the potential bankruptcy of Silvergate. The news triggered a wave of stop orders on fears that the situation could cause a domino effect in the industry, as with FTX earlier in the day.
Technically, the dip has pushed the price below its 50-day moving average, which does not bode well for the short-term outlook, although this signal will only be reliable at the close of the day. The intraday picture is one of tidy buying after a brief dip. The overall moderately positive sentiment in the global markets supports the buy-the-dip mood.
A return above $22.8 an ounce before today's close could spark further buying. Closing near the lows would be an essential signal to spread fear throughout the crypto market, suggesting a further drawdown to $19.7K in the coming weeks.
News Background
Shares in US holding company Silvergate Capital Corporation, which owns crypto bank Silvergate, plunged almost 49% on news of a delay in publishing its annual report to the SEC. The company said it needed "additional time" to complete its audit.
Silvergate Bank has announced that it may file for bankruptcy due to a massive sell-off and an inability to repay its debts. Coinbase, the largest US cryptocurrency exchange, has announced severing its financial relationship with Silvergate Bank.
According to Glassnode, retail bitcoin investors' purchases have outpaced coin issuance. Investors with balances up to 1 BTC ("shrimps") and between 1 and 10 BTC ("crabs") over the past year have bought 105% and 119%, respectively, more Bitcoins that were mined.
Ethereum developers have set March 14 as the date for the Shanghai upgrade on the Goerli test network. If the test network upgrade succeeds, the main network upgrade could occur in the second week of April.
About the author
Alex Kuptsikevich is a financial market professional with 16-years’ experience and a senior financial analyst at FxPro. He is the author of daily reviews on the impact of economic events with comments featured in top international and Russian media. Alex covers fundamental analysis, global markets, the foreign exchange market, gold, oil, and cryptocurrencies in his analytical pieces. As the senior financial analyst at FxPro, Alex is a guest expert in 1-tier global media such as Forbes, Coindesk, Euromoney and Morning Star.
Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.