Bitcoin is falling. Its early 2023 rally may just be “a stab at a bear market.”
Bitcoin
and other cryptocurrencies fell on Thursday as traders shrugged off the implosion of digital asset-focused bank Silvergate Capital and remained cautious about macroeconomic forces ahead of Friday’s key US jobs report.
The price of Bitcoin has fallen 2% in the past 24 hours to $21,650, extending losses from the past few days and giving back gains from the biggest crypto’s early 2023 rally, which had spurred another bull market. While Bitcoin is up around 30% this year, February’s six-month high above $25,000 looks increasingly out of reach.
“The total capitalization of the crypto market is back below $1 trillion … approaching the February lows and the critical signal level of $21,500,” said Alex Kuptsikevich, an analyst at broker FxPro.
“A break below this level will change the status of the events in question from a ‘typical correction’ to a ‘methodical sell.'” In that case, the path to $18,000 for Bitcoin is open, Kuptsikevich added. “The early-year rally will look like a bump in a bear market, not the start of a long uptrend.”
Cryptos are being squeezed from both sides, with cracks in the industry – notably news that Silvergate (ticker: SI ) subsidiary Silvergate Bank is liquidating and liquidating, threatening ripple effects including increased volatility – adding to broader, macro-led pressures.
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Digital assets have fallen lower along with stocks in recent days on concerns over higher interest rates, with
Dow Jones Industrial Average
and
S&P 500
is losing ground heading into the jobs report to be released on Friday, an important catalyst.
“Bitcoin continues to teeter around three-week lows as Wall Street tries to get a handle on what the Fed’s rate hike campaign will do to the economy,” said Edward Moya, analyst at brokerage Oanda. “The news across the cryptoverse provides no reason to buy this dip.”
Beyond Bitcoin,
Ether
— the second-largest crypto — fell more than 1.5% to below $1,550. Smaller cryptos or altcoins were even deeper in the red, with
Cardano
lose 3% and
Polygon
plunges 8%. Memecoins were not spared, either
Dogecoin
down 3 percent, but
Shiba Inu
— which has seen an isolated peak this week — is down less than 1%.
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Write to Jack Denton at [email protected]
