Crypto Market Downtrend: Millions of Liquidations Recorded After the Looming Silvergate Concerns
Early on Thursday, Bitcoin (BTC) shook a little bit as the crypto-friendly bank Silvergate Capital (SI) lost more than 50% of its value due to concerns that it might not survive. Despite 2023 off to a strong start with BTC being up 34.8% for the year, there has been a dramatic decline.
A barrage of liquidations have been sparked by a sharp drop in the price of Bitcoin across all crypto markets. While Bitcoin slipped from $23,443 to $22,259, $250 million in cryptocurrency holdings were liquidated, as reported by CoinGlass. The most affected traders were those who were long Bitcoin and Ethereum, with $76 million and $40 million in liquidations, respectively.
However, there was no clear reason for the drop, despite the fact that economic headwinds continue to affect the crypto markets. It might also be the possible aftereffects of Silvergate fiasco, which recently declared that it will need to perform a new audit to determine its viability following the collapse of FTX.
Contrary to the FTX collapse in November, which caused bitcoin to plunge to multi-year lows, the impending Silvergate issues had minimal impact on the largest cryptocurrency in the world by market value. On Thursday, the price of bitcoin stayed at $23,000.
According to the anonymous trader and analyst Credible Crypto, BTC has reached low time frame support at $22,243 and must maintain the level to prevent a further decline.
“There is our drop to low time frame support as expected. Now bulls have to make a stand here. If they fail to, then my downside target will be met sooner rather than later… I will also add that until/unless we break the lows at $21,373 I lean bullish (green path),” he wrote.