Bitcoin price holds steady above $23K as Silvergate Capital crumbles
Bitcoin (BTC) wobbled a bit early Thursday as crypto-friendly bank Silvergate Capital ( SI ) shed more than 50% of its value on concerns it might not survive, but reversed course in afternoon trade and is now up 0.4% in the session of the last 24 hours for $23,500.
California-based Silvergate said in a filing late Wednesday that the impact of recent events — particularly the collapse of the FTX exchange and subsequent regulatory inquiries — raised questions about the bank’s ability to “continue as a going concern.” The news led to at least two sell-side downgrades and a wide range of crypto firms pulling their business from the lender. Shares were down 58% shortly before the end of Thursday trading.
Unlike, say, the FTX collapse in November, which sent bitcoin plunging to multi-year lows, the looming concerns over Silvergate had little effect on the world’s largest cryptocurrency by market capitalization. The price of bitcoin on Thursday remained in the mid-$23,000 range.
That the Silvergate news has not acted as a negative catalyst “has to be seen as a positive,” said Julius de Kempenaer, senior technical analyst at StockCharts.com.
“If they (crypto traders) really wanted to panic, we should have seen it in the price by now,” Kempenaer told CoinDesk in an email. “Maybe things will deteriorate down the road, but for now the markets seem to be able to digest this without too much trouble.”
Ether (ETH), the second-largest cryptocurrency, rose 0.5% to around $1,650. The CoinDesk Market Index (CMI), which measures the overall performance of the crypto market, was up 0.06% for the day.
Looking at traditional markets, stocks turned green on Thursday afternoon, with the S&P 500 up 0.8%. Market participants across the board are eyeing the Federal Open Market Committee meeting later this month, with more than 30% of traders now expecting the FOMC to ditch recent 25 basis point moves and raise rates 50 basis points, the CME FedWatch Tool showed.
Federal Reserve speakers “continue to talk higher longer, with some even hinting at the difficulty of achieving a soft landing,” Singapore-based crypto options trading firm QCP Capital said in a Telegram note.
“I think many observers expect sideways action in the market over an extended period of time,” Jake Boyle, chief commercial officer at crypto brokerage Caleb and Brown, told CoinDesk. To curb inflation that is stickier than hoped, he said, “[is] bound and determined to keep economic conditions tight for quite some time.”
For the price of BTC, “the rhythm of higher highs and higher lows (uptrend) is still in place and will remain in place until the recent low of $22,800 is taken out to the downside,” said StockCharts.com’s Kempenaer. “Such a pause will be the first sign of weakness.” Kempenaer sees more serious support around $21,400.
“What a potential positive catalyst could be remains to be seen, but once BTC can take out the overhead supply around $25,000, the outlook will certainly improve,” he added.
