Bitcoin (BTC) struggled to regain $20,000 support March 10 on Wall Street as fears of a Silicon Valley Bank (SVB) infection mounted.
Trader targets $18,000 Bitcoin price
Data from Cointelegraph Markets Pro and TradingView BTC/USD followed as it suffered fresh losses, reaching $19,569 on Bitstamp.
The pair saw further declines before the open as beleaguered SVB Financial saw another 60% drop in its share price.
In a move mimicking Silvergate, the crypto-exchange’s banking partner, SVB also began creating spillover effects for non-US banks that day.
For Cointelegraph contributor Michael Van de Poppe, founder and CEO of trading firm Eight, the writing was on the wall.
“First it was Silvergate, then Silicon Valley Bank and now First Republic Bank. It all sank big in the markets. It’s 2008 again,” he said. summary.
Still, US stocks started the March 10 session in the red as anxious traders waited to see the full extent of the SVB infection.
“Silvergate and Silicon Valley both seem to have invested in lower-yield Treasuries ahead of the Fed’s tightening cycle… Treasuries that nobody wants to buy right now with ‘risk-free’ 5% Treasuries direct from the government” , part of the comments of trader and analyst Scott Melker stated.
“They were forced to sell at a huge discount, and incur huge losses. This shakes market confidence, causes more withdrawals and leads to bankruptcies.”
Melker said the setup was a “slippery slope”.
Regarding BTC price action, Van de Poppe meanwhile looked as low as $18,000 for a potential long entry. On the other hand, more than $20,000 was a short opportunity now.
Commentators see Fed pressure rising
The silver lining came in the form of what market commentator Holger Zschebitz said described US jobs data is “mixed,” helping to allay fears of a major policy shift by the Federal Reserve.
Related: Why Did Bitcoin Price Drop Today?
“Traders are now pricing in a 25 basis point hike from the Fed in March after today’s jobs data. Previously, a 50 basis point hike was priced in,” popular analytics account Tedtalksmacro added on Twitter too Connection The data is a “mixed bag”.
Data from the CME group FedWatch tool He confirmed the shift in market expectations for the upcoming meeting of the Federal Open Market Committee (FOMC) scheduled for March 22.
For some, however, the extent of the SVB crisis gave reason to believe that the Fed would have no choice but to abandon its monetary tightening and “pivot” in raising interest rates.
“SVB handles an entire bank operation. The bad news is that this will accelerate very quickly into a systemic crisis,” says crypto entrepreneur David Bailey. reaction.
“The good news is that the Fed will have no choice but to pivot soon or risk blowing up the entire financial system,” he added.
The views, ideas and opinions expressed herein are those of the authors alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
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