Bitcoin price is falling. There is trouble at Silvergate.

“Bitcoin continues to find support as it falls to $23,000, an impressive performance amid falling markets and a stronger dollar,” said Alex Kuptsikevich, an analyst at brokerage FxPro. “Significant bearish signal levels for Bitcoin appear to be around $22,700, where the 50-day moving average and local lows from late last week are concentrated.”

A decline in digital asset prices could come as traders monitor problems at Silvergate (ticker: SI), a federally insured US bank that has positioned itself as a mainstay of institutional crypto. Silvergate said in filings late Wednesday that it delayed filing its annual report with the Securities and Exchange Commission, which has led to a dramatic drop in the company’s already depressed share price.

Silvergate reported a loss of $1 billion in the fourth quarter after selling securities at fire prices to stave off a bank run. The company said in its filing that it sold additional securities in January and February and expects to record further losses.

This will affect the bank’s capital adequacy negatively and may lead to it being “less than well capitalised”, the company said. Silvergate also said it is evaluating its ability to continue as a going concern and is “in the process of reassessing its businesses and strategies in light of the business and regulatory challenges it currently faces.”

It looks like an existential threat to Silvergate that could confirm regulators’ fears that crypto poses a danger to the financial system, risking further headwinds for an industry that has been under pressure from regulatory pressure for the past year.

A crisis at Silvergate could also affect crypto markets since the bank facilitates key transfers between exchanges and market makers – which do much of the buying and selling of Bitcoin and other tokens – potentially exacerbating existing liquidity problems. It could see crypto become even more volatile.

More broadly, Bitcoin and its ilk will likely continue to take cues from the stock market, there

Dow Jones Industrial Average

and

S&P 500

have plunged as investors worry about inflation and the future of interest rates. Cryptos far outperformed stocks at the start of the year – against the macro-driven correlation between digital assets and stocks – but have since fallen back in pace.

“At best, we’re likely to see Bitcoin and crypto trade sideways until both the macro and regulatory fronts shift in a more positive direction,” said Quinn Thompson, head of growth and capital markets at Maple, a blockchain trading platform. “In the worst case, we could be in for another leg down. Most market participants therefore appear increasingly to be taking a more cautious approach for the time being.”

Beyond Bitcoin,

Ether

—the second biggest crypto loss less than 1% to below $1650. Smaller cryptos or altcoins were weaker, too

Cardano

crumbling 2.5% and

Polygon

plunges 3.5%. Memecoins were also in the red, with

Dogecoin

down 2% and

Shiba Inu

drop 3%.

Write to Jack Denton at [email protected]