Bitcoin, Ethereum, Dogecoin Slide On Silvergate Panic: Analyst Says 'Time For A Squeeze' As Crypto Market Sees $240M Wipeout

Major coins traded in the red on Thursday evening as the cryptocurrency market experienced intense sell-off pressure in response to news of troubles at Silvergate Capital Corp. 

What Happened: Apex cryptocurrency Bitcoin BTC/USD was trading below $23,000 after a volatile trading session. 

Ethereum ETH/USD was exchanging hands below  $1,600. Dogecoin DOGE/USD was trading at $0.078, down 3.81% in the last 24 hours. 

At the time of writing, the global crypto market capitalization stood at $1.05 trillion, a decrease of 2.02% over the last day.

In the past 24 hours, 81,843 traders were liquidated, accounting for $240.78 million worth of liquidations, according to CoinGlass Data. 

U.S. equities rose Thursday as traders shrugged off concerns about the Federal Reserve's impending interest rate increase. The S&P 500 gained 0.76% while the Nasdaq Composite added 0.73%.

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News Highlights: Crypto-friendly bank Silvergate SI said in a filing late Wednesday that the recent events surrounding the FTX exchange collapse, coupled with subsequent regulatory inquiries, have raised significant questions about the bank's ability to "continue as a going concern.” This news initiated a ripple effect of sell-side downgrades and a variety of crypto companies withdrawing their business from the lender, resulting in its share price dropping 58% before Thursday's close of trade.

MicroStrategy Inc MSTR clarified its status with Silvergate Capital, confirming that it has no assets in custody with the bank and that its only connection is a commitment to repay a loan in 2025.

Analyst Notes: “Bitcoin is lower following a risk-off tone on Wall Street after another impressive jobless claim reading sent Treasury yields surging. We got to be close to the bottom, so this might not have much follow-through unless we have further signs the economy refuses to break. Bitcoin’s trading range continues to hold and any breaches of the $21,500 to $25,000 zone might be temporary unless a major crypto event occurs,” said Edward Moya, senior market analyst at OANDA.    

Crypto analyst Michaël van de Poppe warned that Silvergate might be headed for bankruptcy, pushing prices down a bit further. “People are piling into positions since the news and no real movement on Bitcoin. This might be an assumption people are heavily skewed to the short side here. Time for a squeeze,” the analyst said.

Silvergate potentially going bankrupt, pushing prices down a bit more.

On the other hand; people piling into positions since the news and no real movement on #Bitcoin.

This might be an assumption people are heavily skewed to the short side here.

Time for a squeeze.

— Michaël van de Poppe (@CryptoMichNL) March 2, 2023

Analyst CrediBULL Crypto said that Bitcoin dropped to the long-term support level as expected. “Now bulls have to make a stand here. If they fail to, then my downside target will be met sooner rather than later.”

There is our drop to ltf support as expected- now bulls have to make a stand here. If they fail to, then my downside target will be met sooner rather than later. $BTC pic.twitter.com/T6sIquMPdH

— CrediBULL Crypto (@CredibleCrypto) March 3, 2023

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