Arslan Butt
Bitcoin has plummeted below $20,000 for the first time in two months as several macroeconomic factors converge on BTC.
They include remarks from US Federal Reserve chairman Jerome Powell, President Joe Biden’s proposed tax on crypto miners’ electricity costs, and the closure of Silvergate Bank.
There’s more pain for Bitcoin (BTC) investors as the price of the leading cryptocurrency crashed below $20,000 on Friday.
At the time of this writing, Bitcoin is down 8.3% over the day, trading at $19,900 the level last seen on January 13, according to Coingecko.
Ethereum (ETH)… https://t.co/wEkNCXmGs5 pic.twitter.com/nMDRe5E8Rw
— STACKMASTER (@IAMSTACKMASTER) March 10, 2023
The closure of Silvergate Bank has had a significant impact on the crypto industry as it provided critical services to crypto businesses.
The recent drop in Bitcoin’s price has raised concerns among investors and the cryptocurrency sector, suggesting that the market may be in for difficult times.
There’s more pain for Bitcoin (BTC) investors as the price of the leading cryptocurrency crashed below $20,000 on Friday.
At the time of this writing, Bitcoin is down 8.3% over the day, trading at $19,900 the level last seen on January 13.#crypto #cryptocurrency #fyp pic.twitter.com/1fp0ZM9hLz
— Bitcounts Inc. (@BitcountsINC) March 10, 2023
Bitcoin Price
The current Bitcoin price is $19,715, and the 24-hour trading volume is $39.3 billion.
Over the past 24 hours, Bitcoin has dropped by 9%.
As the market leader, Bitcoin now has a live market value of $380 billion. It has a total quantity of 21,000,000 BTC coins and a circulating supply of 19,313,300 BTC coins.
On the technical front, the BTC/USD pair is trading with a sharp selling bias, having disrupted the double-bottom support level of $20,350 level.
Bitcoin Price Chart – Source: Tradingview
On the downside, Bitcoin’s current support level is at $18,430. If this level is broken, it could lead to further selling pressure and a drop toward the $16,400 level.
However, on the upside, Bitcoin is expected to face immediate resistance at the $20,300 level.
A breakout above this level could lead to further buying and a rise toward the $21,400 level. Further upside movement could potentially push the BTC price toward the $25,000 mark
The Closure of Silvergate Bank: Analyzing Its Impact on the Cryptocurrency Industry
The recent shutdown of Silvergate Bank, a crucial banking partner for crypto companies in the United States, was considered a key factor exerting downward pressure on BTC prices.
However, the exact reason behind Silvergate Bank’s closure remains unclear.
It is speculated that the bank’s exposure to risky loans extended to fintech and cryptocurrency firms might have played a role.
The #crypto market experienced a flash crash after #Silvergate Bank revealed it may not survive regulatory scrutiny, resulting in the largest number of liquidations from leveraged #BTC. The closure of Silvergate's exchange Network may have contributed to the BTC price… https://t.co/mECbyBRAtI pic.twitter.com/gg516bDQRe
— Jadid Herrera (@jadid) March 6, 2023
It is essential to mention that Silvergate Bank has been offering critical services to the cryptocurrency industry, such as wire transfers, custody, and fiat deposits.
As a result, the bank’s shutdown could have a significant adverse impact on the cryptocurrency market.
This could impede the sector’s growth and create more uncertainty for investors.
US Cryptocurrency Miners Will Likely Face a 30% tax on Electricity Costs.
Another factor contributing to the decline in Bitcoin’s price is the release of a supplementary budget explainer paper on March 9.
The paper disclosed that US crypto miners could potentially face a 30% tax on their electricity costs under a Biden budget proposal that aims to “reduce mining activity.”
It is essential to note that this proposal could have a significant impact on the crypto-mining industry, leading to further uncertainty in the cryptocurrency market.
Breakfast News
RATING:
President Joe Biden's budget proposal, which aims to "reduce mining activity," could eventually subject cryptocurrency miners in the United States to a 30% tax on electricity costs. pic.twitter.com/jPa2MaByXg— The Bull's Journal (@thebullsjournal) March 10, 2023
This proposal could have a significant impact on the crypto-mining industry, as it could potentially reduce mining activity in the US.
This could, in turn, have a ripple effect on the entire cryptocurrency market.
Risk-Off Sentiment Grips Cryptocurrency Market: Market Capitalization Falls Below $1 Trillion
Due to the sharp decline in Bitcoin’s price, the global market capitalization of cryptocurrencies has once again fallen below $1 trillion.
Other popular altcoins, including Ethereum, Dogecoin, and Litecoin, have also suffered significant losses on the day.
GM! Stock Market futures are flat but #crypto is down big over 24hrs. #BTC is down 9% & below $20K#ETH is down 10% & below $1,4K
️: 'Relax' by @delta_sauce – just keep this in mind as crypto crashes! pic.twitter.com/ydipEnqSJg
— Mat Litalien (@matlitalien) March 10, 2023
Additionally, the comments made by the US Federal Reserve Chair, Jerome Powell, have had a significant impact on the cryptocurrency market.
Powell’s statements on inflation and interest rates have contributed to the decline in cryptocurrency prices.
In a recent statement, he suggested that the central bank may begin to raise interest rates sooner than expected, causing concern among investors about the potential impact on the economy and cryptocurrencies.
Powell’s remarks have continued to exert a negative influence on the cryptocurrency market for the second consecutive day, adding to the existing concerns about the regulatory landscape and the future of cryptocurrencies.
Eyes On Upcoming US Jobs Data
Traders are keeping a close eye on the release of nonfarm payrolls and unemployment rate data by the US Bureau of Labor Statistics, as it could potentially have a significant impact on Bitcoin (BTC) prices.
Earlier Today, @federalreserve Chairman Powell spoke with Congress.
Powell: "We have important data coming up including the jobs report on Friday and both CPI and PPI inflation next week.”
This upcoming data will determine the fate of the US economy… pic.twitter.com/6KMHiKAP8T
— Clem Ziroli III (@ClemZiroli) March 9, 2023
However, the current market consensus is that nonfarm payrolls have increased by 205K jobs, and the unemployment rate has fallen to 3.4% in February.
With strong growth in January and a low unemployment rate, the US Federal Reserve may continue with rate hikes for an extended period, potentially announcing a 50 bps rate hike this month.
This policy is likely to have an impact on BTC prices, but more clarity is expected to be provided by the US CPI inflation data on March 14th.
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This article was written for Business 2 Community by Arslan Butt.
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