Bitcoin Price Holds Steady Above $23K as Silvergate Capital Crumbles
That Silverage’s troubles are not a negative catalyst for BTC’s price “has to be seen as a positive,” one analyst says.
Bitcoin (BTC) wobbled a bit early Thursday as crypto-friendly bank Silvergate Capital (SI) shed more than 50% of its value on worries it may not survive, but turned upward in afternoon trading and is now higher by 0.4% over the past 24 hours at $23,500.
California-based Silvergate said in a filing late Wednesday that the impact of recent events – notably the FTX exchange collapse and subsequent regulatory inquiries – raised questions about the bank's ability to "continue as a going concern.” The news led to at least two sell-side downgrades and a wide range of crypto firms pulling their business from the lender. Shares were down 58% shortly before the close of Thursday trade.
Unlike, for instance, the FTX collapse in November, which sent bitcoin plunging to multi-year lows, the looming concerns on Silvergate had little effect on the world’s largest cryptocurrency by market value. The price of bitcoin on Thursday remained in the mid-$23,000 area.
That the news around Silvergate has not been working as a negative catalyst “has to be seen as a positive,” said Julius de Kempenaer, senior technical analyst at StockCharts.com.
“If they (crypto traders) really would be panicking, we should have seen that in the price by now,” Kempenaer told CoinDesk in an email. “Maybe things will worsen down the road, but for the time being the markets seem to be able to digest this without too much problem.”
Ether (ETH), the second-largest cryptocurrency, was up 0.5% to about $1,650. The CoinDesk Market Index (CMI), which measures overall crypto market performance, was up 0.06% for the day.
Looking at traditional markets, equities turned green Thursday afternoon, with the S&P 500 up 0.8%. Market participants across the board are eyeing the Federal Open Market Committee meeting later this month, with over 30% of traders now expecting the FOMC to ditch the recent 25-basis point moves and hike rates 50-basis points, the CME FedWatch Tool showed.
Federal Reserve speakers “continue to talk about higher for longer, and some are even alluding to the difficulty of achieving a soft landing,” said Singapore-based crypto options trading firm QCP Capital in a Telegram note.
“I think a lot of observers are expecting sideways action in the market for a prolonged period of time,” Jake Boyle, chief commercial officer at crypto brokerage Caleb and Brown, told CoinDesk. Looking to curb stickier than hoped inflation, the Fed, he said, “[is] bound and determined to keep financial conditions tight for a good while.”
For the price of BTC, “the rhythm of higher highs and higher lows (uptrend) is still in place and will remain in place until the recent low at $22,800 is taken out downward,” StockCharts.com’s Kempenaer said. “Such a break will be the first sign of weakness.” Kempenaer sees more serious support around $21,400.
“What a potential positive catalyst could remain to be seen, but when BTC can take out the overhead supply around $25,000 the outlook will certainly improve,” he added.
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