Daily News | Declining BTC and ETH Triggered by Silvergate's Troubles and Regulator Crackdown, Investor Attention on Key Jobs Data

2023-03-06, 01:41

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## Crypto Daily Digest: Silvergate Under Fire as $195M BTC Positions Liquidated, Investor Attention on Key Data Amid Market Uncertainty

Good morning and Happy Monday, traders! Hope you had a good weekend. Let's seize this day relentlessly and make the most of it! 🚀

In early Asian trading, the dollar saw a slight increase as China's diminished likelihood of significant stimulus decreased investors' appetite for risk. Premier Li Keqiang's announcement of an economic growth target of around 5%, lower than market expectations, has reduced the likelihood of additional government spending to boost asset prices, causing concerns about the momentum of recent stock rebounds in China and Asia. While US stocks ended the week on a positive note, this news from China may weaken investor sentiment. This week, investors will closely watch the National People's Congress in Beijing and the US non-farm payrolls report, among other key economic data and events.

On Friday, the price of <a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> experienced a sharp decline, resulting in the liquidation of over $195 million in BTC long positions. This decline was driven by concerns about the viability of crypto bank Silvergate. Although <a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> and Ether remain higher for the year, they are currently trading below their 20-day moving averages. The correlation between crypto and traditional financial assets has weakened, with a correlation coefficient of -0.31 between BTC and the S&P 500, implying reverse movements are to be expected. Among the top 300 coins, TrueFi (TRU) was the top performer of the week, with its price rising by 92% in the last seven days.

Meanwhile, Short sellers are targeting Silvergate, and some predict its downfall. The bank has faced recent struggles due to its connections with FTX and Alameda Research, causing its shares to drop significantly over the past six months. After a Moody's downgrade, Silvergate closed one of its key money transfer platforms, the Silvergate Exchange Network. As an alternative, some crypto companies are now considering Swiss banks.

## Topic of the Day: Crypto Market Suffers as <a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> and <a href="/price/ethereum-eth" target="_blank" class="blog_inner_link">Ethereum</a> Decline, Bankless Co-Host Apologizes for Spreading Rumors

<a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> (BTC) and <a href="/price/ethereum-eth" target="_blank" class="blog_inner_link">Ethereum</a> (ETH), two of the most popular cryptocurrencies, have experienced losses for two consecutive weeks, with both seeing a decline of almost 5%. This drop was triggered by the news that Silvergate, a crypto bank, had postponed filing its annual report with the SEC, which led to a 57% drop in its stock price by Friday's close. The drop in Silvergate's stock price had a ripple effect on other top cryptocurrencies, including <a href="/price/cardano-ada" target="_blank" class="blog_inner_link">Cardano</a> (ADA), <a href="/price/polygon-matic" target="_blank" class="blog_inner_link">Polygon</a> (MATIC), <a href="/price/avalanche-avax" target="_blank" class="blog_inner_link">Avalanche</a> (AVAX), <a href="/price/cosmos-hub-atom" target="_blank" class="blog_inner_link">Cosmos Hub</a> (ATOM), and <a href="/price/chainlink-link" target="_blank" class="blog_inner_link">Chainlink</a> (LIINK), which all suffered double-digit percentage drops. In addition, regulators worldwide are tightening their grip on cryptocurrencies, with Coinbase delisting BUSD, a stablecoin created by Binance, and Robinhood receiving a subpoena from the SEC for its cryptocurrency operations.

Meanwhile, <a href="/price/ethereum-eth" target="_blank" class="blog_inner_link">Ethereum</a> is preparing for its upcoming Shanghai upgrade, which will allow users who have staked their <a href="/price/ethereum-eth" target="_blank" class="blog_inner_link">Ethereum</a> to withdraw their funds. Reports have shown that only a slim majority (16%) of stakers are currently in the money, and the upgrade could result in significant losses for most users. Some DeFi projects are betting on users doubling down on staking and are offering leveraged mechanisms, but this is also a risky move.

On another note, David Hoffman, co-founder of Bankless content studio, apologized for spreading unverified rumors about a "Wells notice carpet bombing" targeting crypto firms, including Lido Finance (LDO). A Wells notice is a warning sent by a regulatory authority to inform about violations found through an investigation. The rumor led to a nearly 20% decrease in the <a href="/price/lido-dao-ldo" target="_blank" class="blog_inner_link">Lido DAO</a> token price between March 3 and 4. stablecoin issuer Paxos also recently received a Wells notice from the SEC for allegedly violating investor protection laws. Rumors about Wells notices also hit Circle but were quickly debunked.

## <a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> (BTC) $22,455.77 (+0.3%) - Neutral Outlook

**Overview:**

- ***Closest daily support zone: 22162 - 21717***
- ***Closest daily resistance zone: 22753 - 23225***
- ***Key Level: 19858 (Monthly High of Dec. 2017)***

![](https://gimg2.gateimg.com/image/article/1678066760Untitled03061.png)

![](https://gimg2.gateimg.com/image/article/1678066772Untitled03062.png)

BTC's weekly timeframe shows a potential bearish RSI divergence phenomenon, which could have significant implications for most coins since BTC represents the entire crypto sector. The 3D timeframe has already confirmed this bearish divergence, while the 1D timeframe highlights three significant stop-loss order zones: 23150 - 22750, 21630 - 21455, and 20675 - 20410. The critical level to watch for now is around 21500, and if BTC breaks this level, it may target 20000, a significant psychological level for many investors. Over the weekend, BTC had minimal movements, but the price action remains relatively safe above the base of the ascending regression channel. It is unclear if there will be a sudden surge of volatility that pushes the price higher above the base or brings the price down to enter the new descending regression channel, which will likely bring BTC toward 21500. However, if BTC pushes higher and closes within or above the daily Fibonacci golden zone between 22977 - 23169, the sudden surge of market fears may significantly calm down.

**Daily Resistance zones**

1. 22753 - 23225
2. 23714 - 23959
3. 24269 - 25070

**Daily Support zones**

1. 22162 - 21717
2. 21128 - 20470
3. 19858 - 19253

<div class="blog-details-info">
<div>Author:** Peter L.**, Gate.io Researcher
<div class="info-tips">\*This article represents only the views of the researcher and does not constitute any investment suggestions.
<div>\*Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all cases, legal action will be taken due to copyright infringement.
</div>