After muted trading in the last few sessions, top crypto tokens were reeling under severe pain on Friday on the back of Silvergate buzz. Major Crypto firms distanced themselves from Silvergate and crypto clients continue to flee the beleaguered bank.
Silver gate announced it would have to review its books with its auditors and warned of several headwinds. Silvergate seems to be having issues but other major crypto exchanges did not report similar issues.
Bitcoin plunged sharply as the largest crypto asset slipped below the $23,000-mark. It dropped about 5 per cent to hover near $22,300. Its largest peer Ethereum also posted similar cuts to slip below the $1,600-level during the early trade. Pain in altcoins was severe.
In the past 24 hours, most cryptocurrencies have suffered a drop in value for multiple reasons, such as the US manufacturing data release and uncertainties surrounding access to banking for crypto firms in the US The fallout of Silvergate has also contributed to this decline, said Edul Patel, Co-founder and CEO at Mudrex.
“Both Bitcoin and Ethereum experienced a 5 per cent reduction, resulting in the loss of their weekly profits. Bitcoin has hit its lowest point in roughly two weeks, trading below the $23,000 level at $22,300. Investors and traders are carefully observing economic data, and other factors in anticipation of potential inflation and interest rate increases,” he said.
Barring the US dollar-pegged stablecoins, all other top and popular crypto tokens were trading with big cuts on Friday. Litecoin plunged about 9 per cent, whereas Avalanche was trading 8 per cent lower. Dogecoin and Cardano shed 7 per cent each, whereas Polkadot and Shiba Inu declined 6 per cent each.
The global cryptocurrency market cap was trading sharply lower at the $1.02 trillion mark, dropping about 5 per cent in the last 24 hours. However, the total trading volumes jumped almost 9 per cent to $52.96 billion.
The cryptocurrency market has also experienced a bearish correction as Coinbase and LedgerX both announced their exit from Silvergate Bank due to concerns about the bank’s solvency, Sathvik Vishwanath, Co-Founder and CEO at Unocoin.
“This resulted in Silvergate shares plummeting almost 50 per cent to an all-time low. These market movements indicate increased volatility and potential near-term weakness in the cryptocurrency market,” he said. “On the 4-hour chart, Ethereum has seen a sharp decline and may potentially test the next support level at $1400.”
Tech View By Giottus Crypto Platform
Litecoin (LTC) has been trading between its golden pocket at $98 and the 0.5 fib level at $87, offering very little to either of the bulls or the bears. After being rejected by its golden pocket today, LTC went down by almost 10% in its last candle.
The coming hours should be interesting for LTC, with $98 acting as strong resistance while $87, the fib level of 0.5 acting as strong support.
If LTC manages to reclaim $100, the fib resistance at $114 would be the next target for bulls. LTC’s RSI at 30 also indicates that it might be oversold.
The golden pocket at $98 and well as the 50-day moving average at $93 is currently the strong resistance levels. LTC’s 200-day moving average at $70 also suggests that bears have a good chance of pulling it down to those levels.
Major Levels
Resistance: $93, $98, $102, $114
Support: $87, $76
(Views and recommendations given in this section are the analysts’ own and do not represent those of Business Today. Please consult your financial adviser before taking any position in the asset/s mentioned.)
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