Silvergate declared bankruptcy and hit squarely at the cryptocurrencies. Bitcoin loses almost 2% in the last 24 hours and falls to $21,600, its lowest level in the last month. For its part, Ethereum resists and the drop is 1%, pushing it below $1,500. Likewise, the market capitalization of cryptos once again fell below a trillion dollars.
Another of the largest partners in the cryptocurrency industry announced its bankruptcy and ended up consolidating the bearish sentiment of recent weeks. Last Friday, Silvergate announced that it would delay the publication of its annual results.
As if that were not enough, cryptocurrencies have had to deal with a tougher-than-expected Federal Reserve (Fed). President Jerome Powell revealed that the terminal rate level will be higher than anticipated due to stronger-than-expected labor market data and inflation falling more slowly than he would like.
“We have not yet made any decision on the March meeting,” Powell assured this Wednesday before the House of Representatives, although he has once again stressed that the Fed does not follow a “pre-established” path.
“The second day of statements by Powell it was as aggressive as the first, with one small exception: He said the data will determine whether the Fed will increase the rate of hikes. But, if Powell’s intent was to cool down the 50bps betting, it didn’t go according to plan”, explained Ipek Ozkardeskaya, a senior analyst at Swissquote Bank. In this sense, the CME FedWatch tool estimates that there is about an 80% chance that the central bank will push interest rates into the 500-525 range basic points. Just a week ago, the probability of a rise of this magnitude occurring was barely more than 30%.
Can Bitcoin trade at lows?
“I suspect we could retest the lows reached last year as a result of the rate hike, but also because of the Fed’s current tightening regime, which is draining liquidity from the markets,” said Quinn Thompson, director of markets. of Maple’s capitals in Bolsamanía.
According to this expert, “much of this tightening of monetary policy is being reflected in the prices of the fixed income markets.” “Risk assets have yet to price in the potential for downside contagion, and this could spell trouble for equities and cryptocurrencies”he added.
In the rest of the cryptocurrency market, decreases of up to 5% are led by Polygon, Dogecoin (2.6%) and Cardano (2.1%).
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