Crypto Economy Sinking Effect
The past two weeks were the harshest weeks so far for the global crypto economy since the year 2023 began.
Within the previous two weeks, Bitcoin saw its value drop from $25,000 to a price level of $19,669.92.
Similarly, Ethereum’s value was also tormented by the market downturn which reduced its price from $1,543.69 to $1,378.53.
The reason behind this negative motivation is identified as the fresh nonfarm payroll data to be issued by the US. With regard to this data, it is expected that US Federal Reserve would be adopting aggressive policies.
It seems that the US government has already started working against the cryptocurrency industry. It has been taking all the necessary measures to ensure that the expansion of the crypto industry is halted in the country.
The US regulators, especially, the US Securities and Exchange Commission and the FDIC have become very aggressive against the crypto industry.
They have started taking down multiple banking firms that are linked with the crypto firms. They are doing a lot of passive damage to the crypto industry by taking down crypto-pro banks.
Here is how the lead cryptocurrencies’ economies responded to the rumor pertaining to the US’s upcoming non-farm payroll data release.
Bitcoin Analysis & Progression
Last week, from Monday to Thursday, Bitcoin’s value had consistently been chopped off beginning from the price range of $25,000. Within these 5 days, Bitcoin went as low as $19,669.92.
At that moment, Bitcoiners feared that prices may go down even under the price range of 13th January 2023 i.e. $18,714. Luckily, Bitcoin resisted and while resisting it went above $21,796.12.
Today, Bitcoin is trading at a price range exceeding $22,168.
Currently, there are two major factors that are playing a negative role with regard to crypto markets. The first is the liquidation proceedings pertaining to ‘Silvergate Bank’.
Second is the rumor concerning US Federal Reserve adopting strict monetary policies for the future.
Other Factors Affecting Bitcoin
On a side note, Senator Elizabeth Warren is vigorously pursuing her protest against entire cryptocurrencies. Her assumption that crypto is behind the harshest contagions of recent times, hasn’t changed a bit.
She continues to advocate that crypto is the real culprit behind the fall of Terra Luna, FTX, and now Silvergate Bank.
In any case, Bitcoin’s decline could also be attributed to its under-performance, especially with regard to its 14-day relative strength index (RSI).
The index indicated 32.00 as the crucial floor mark and anything below it was destined to accelerate value declines.
It was because Bitcoin failed in keeping its performance above 32.00 which resulted in value declines consecutively for five straight days.
Ethereum Analysis & Progression
Significant value declines became apparent for Ethereum throughout the five days of trading in the past week.
Although, Ethereum is currently switching hands at $1,586, however, on Friday, it fell as low as $1,378.53.
A day earlier on Friday, Ethereum did manage to go as high as $1,543.69 but the crypto market downturn impacted Ethereum.
Resultantly, Ethereum’s value was reduced by at least 10% which, as of today, has rebounded back and moving ahead positively.
As compared to Bitcoin, Ethereum was in fact trading safe as though it was subjected to reduction, yet resistance was there.
While Bitcoin is still trying to get to its week-ago price of $25,000 but has so far managed to settle at $22,168.
Considering the factors existing currently, it cannot be assumed that the crypto market would do any better in the near future.
The proceedings of Silvergate Bank’s liquidation have just begun and it is expected that more facts would be unearthed soon.
Regulators have also taken serious note of Silvergate’s fall which has instantly chopped the Bitcoin economy by more than $70 Billion.
Silvergate was an integral part of the crypto industry as it was offering exclusive loans to the industry. However, the bank announced going into liquidation process in a winding up proceedings because of financial hardships.