Bitcoin, Ethereum, Dogecoin Plunge After Silvergate Failure, But Here’s Why A Bounce Could Be In The Cards

Bitcoin (CRYPTO: BTC) was sliding over 2% lower on Friday, in tandem with the S&P 500, which was dropping about 1.6% amid recently announced failures in both the banking industry and the crypto sector.

On Thursday, Silicon Valley-based SVB Financial Group’s attempt at fundraising and crypto bank Silvergate Capital Corp annoucement it will shut down sent shockwaves through the general market and crypto sector. Traders and investors fear the announcements could just be the tip of the ice-berg of problems in the industry.

Stubborn inflation and soaring interest rates have added downward pressure to banks, which saw many fewer deposits in the fourth-quarter. The economic situation has drained liquidity from the banking industry, a problem that could spread if the central bank continues with its hawkish policy for much longer.

Ethereum (CRYPTO: ETH) and Dogecoin (CRYPTO: DOGE) were also reacting to the news bearishly, each edging over 1% lower. From a technical perspective, all three cryptos are likely to bounce over the next few days, however, due to signals that have developed on their charts.

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The Bitcoin Chart: Bitcoin started trading in a downtrend on Feb. 21 and has made a consistent series of lower highs and lower lows. The crypto’s most recent lower high was formed on March 5 at $22,654 and the most recent confirmed lower low was printed at the $21.988 mark two days prior.

During Thursday’s 24-hour trading session, Bitcoin printed a bearish Marubozu candlestick, which indicated lower prices were likely in the cards for Friday. On Friday, lower prices came but the crypto was attempting to bounce up from its low-of-day.

• If Bitcoin closes Friday’s session with a significantly lower wick, the crypto will print a bullish hammer candlestick, which could indicate higher prices will come on Saturday. A bounce is also likely because Bitcoin’s relative strength index (RSI) is measuring in at about 27%, which puts the crypto in oversold territory.
• Bullish traders want to see Bitcoin bounce because if the crypto continues lower, it will lose support at the 200-day simple moving average (SMA), which puts Bitcoin in bear territory.
• Bitcoin has resistance above at $20,545 and $21,313 and support below at $19,915 and $18,385.

The Ethereum Chart: Like Bitcoin, Ethereum entered into a downtrend but on Feb. 16 and has been making a series of lower lows and lower highs. In Ethereum’s case, the most recent lower high was formed on March 5 at $1,588 and the most recent confirmed lower low was printed at the $1,547 mark on March 3.

• Like Bitcoin, Ethereum was working to print a hammer candlestick during Friday’s session, with the bottom of the hammer just above the 200-day SMA, which indicates a bounce could be on the horizon. Ethereum’s RSI hasn’t quite reached official oversold territory but is beginning to curl higher, which is bullish for the short-term.
• Ethereum has resistance above at $1,564 and $1,717 and support below at $1,308 and $1,231.

The Dogecoin Chart: Unlike Bitcoin and Ethereum, which entered into downtrends more recently, Dogecoin has been trading in that pattern since Feb. 4. Dogecoin’s most recent lower high was created on March 7 at $0.075 and the most recent confirmed lower low was formed at the $0.072 mark on March. 3.

• Dogecoin was also working to print a hammer candlestick during Friday’s 24-hour trading session, which could indicate a bounce is on the horizon. Dogecoin’s RSI is measuring in at 23%, which indicates the bounce could be strong when it comes.
• Dogecoin has resistance above at 7 cents and $0.075 and support below at $0.065 and $0.057.

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