Bitcoin (BTC) erased early-month gains on March 2 as fresh market uncertainty erupted over solvency of crypto bank Silvergate.
BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView
BTC price avoids Silvergate, Coinbase stock slip
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD hitting $23,206 on Bitstamp, down around 1.5% on the day.
The pair came under pressure as rumors swirled over the fate of Silvergate, which lost United States exchange Coinbase as a client in a decision the latter said came out of “an abundance of caution.”
Silvergate had suffered as a result of the FTX implosion, delaying its 10-K report this week and warning that it could be “less than well capitalized.”
The shares of parent company Silvergate Capital were down 40% on the day at the time of writing.
Coinbase also felt the pressure, with Coinbase Global (COIN) shares losing 9.65%, with BTC price action itself nonetheless avoiding major knock-on losses.
“Silvergate potentially going bankrupt, pushing prices down a bit more. On the other hand; people piling into positions since the news and no real movement on Bitcoin,” Cointelegraph contributor Michaël van de Poppe, founder and CEO of trading firm Eight, reacted.
“This might be an assumption people are heavily skewed to the short side here. Time for a squeeze.”
Popular trader and analyst Stack Hodler had a similar view, suggesting that current events should not form a reflect on Bitcoin itself.
“Coinbase, Silvergate, Bank of America, and the Federal Reserve could all implode overnight and it wouldn’t change the number of Sats I hold in cold storage,” he told Twitter followers.
“The beauty of holding #Bitcoin without counter-party risk.”
Focusing on immediate price performance, however, others were in risk-off mode, looking for a reclaim of 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 at a logical place- still think a visit to the ltf support (green line) makes the most sense on low time frames before we decide which direction to go in,” a slightly more bullish Credible Crypto forecast alongside a chart with target areas.
“I will also add that until/unless we break the lows at $21,373 I lean bullish (green path).”
BTC/USD annotated chart. Source: Credible Crypto/ Twitter
Inflation reports disappointing for risk assets
Another point of concern came from macroeconomic data on the day, this showing inflation remaining more persistent than hoped for by central banks.
Related: 3 BTC price hurdles Bitcoin bulls are failing to clear in 2023
Both the U.S. and European Union produced unsavory reports, with the former showing unemployment not heating up.
“Initial Jobless & Continuing Jobless Claims came in cooler than expected,” Keith Alan, co-founder of monitoring resource Material Indicators, summarized, arguing that the Federal Reserve and Chairman Jerome Powell may now have an additional incentive to keep interest rates climbing – a key headwind for crypto and risk assets.
“This is the exact opposite of what the FED wants to see to tame inflation. IMO, this is going to strengthen JPow’s resolve to go higher for longer. Remember Higher and Longer are both on a sliding scale.”
According to CME Group’s FedWatch Tool, bets on a larger rate hike in March than in February stood at 32% after the jobless claims data.
Fed target rate probabilities chart. Source: CME Group
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