Bitcoin’s price breaks. Analysts view “Death Cross” cautiously.
Bitcoin
and other cryptocurrencies were little changed on Monday, staying lower from recent levels on concerns that pressure on crypto-focused banks could affect markets.
The price of Bitcoin has traded almost flat over the past 24 hours to below $22,400. The largest digital asset is holding on to its lowest levels since early February, having hovered between $23,000 and $25,000 for much of the past month before dropped to the $22,000 zone late last week amid negative news surrounding crypto-focused banks.
“The crypto market has experienced a cooling off period where Bitcoin is experiencing some decline and altcoins are following suit with even deeper retracements,” wrote the author of the popular crypto technical analysis newsletter Rekt Capital over the weekend.
Increasing regulatory scrutiny and revelations about a financial crisis at Silvergate Capital (ticker: SI ), an influential banker to the digital asset industry, have proven to be catalysts for the latest decline. Problems at Silvergate and the prospect of regulators cracking down on banks in the area have raised fears that crypto companies could struggle to access banking services in the US in what could prove to be a fresh headwind for the token markets.
While Bitcoin and its peers face pressures endogenous to crypto, digital assets are likely to be sensitive to macro news and stock market-led action in the coming days. Investors are more generally concerned about inflation and interest rates in the US – factors that also affect demand for digital assets.
Bitcoin is likely to take cues from
Dow Jones Industrial Average
and
S&P 500
over the next week or so, with congressional testimony from Federal Reserve Chairman Jerome Powell on Tuesday and Wednesday, the monthly US jobs report on Friday, and US inflation data next week in print.
Advertisement – Scroll to continue
A busy period for crypto news and a wave of macro catalysts could leave digital assets vulnerable to pulling back more gains from their roaring rally to start the year. Bitcoin had marched higher from around $16,500 in early January to over $25,000 – its highest level since last summer – at a recent peak in February.
But the technical picture for crypto seems to be weakening.
“While Bitcoin/US Dollar has held its ground under furious selling attacks, it is in no rush to bounce back from the bottom,” said Alex Kuptsikevich, an analyst at broker FxPro.
Advertisement – Scroll to continue
“Technically, the 50-week moving average continues to act as a valid resistance from which selling is intensifying,” Kuptsikevich added. “The death cross formed on the weekly timeframe provides a cautious view on the near-term outlook and holds the potential for a return to the $16,300 to $18,000 level.”
In fact, analysts look warily at a “death cross,” which refers to a phenomenon in technical market analysis where a chart shows the 50-day moving average price of an asset falling below its 200-day moving average — a gloomy sign. Despite showing a death cross on the chart, Bitcoin remains relatively stable, at least for now.
Beyond Bitcoin,
Ether
—the second biggest crypto loss less than 1% to below $1,575. Smaller cryptos or altcoins were weaker, with both
Cardano
and
Polygon
down 2%. Memecoins showed similar action, with
Dogecoin
and
Shiba Inu
each departure 2%.
Write to Jack Denton at [email protected]
