Bitcoin slipped to its lowest level in two weeks as alternative coins were hit with major losses due to Silvergate’s failure to submit its annual report to the SEC. Silvergate is a bank that provides a payment platform allowing the real-time transfer of funds between cryptocurrency companies. After their submission delay, many of Silvergate’s clients, including exchanges, stablecoin issuers, and trading firms, have had to turn to Silvergate’s biggest competitor Signature.
Apart from the current consequences and expected liquidity shortage, traders and investors are contemplating the potential issues that could arise from Silvergate’s insolvency, including a possible chain reaction of collapses in the crypto space that could cause irreparable damage to the industry. This has been reflected in the Crypto Fear & Greed Index, which has come down to its 50-neutral level, despite Bitcoin trading 35% higher than it did this time last year.
Adoption of Cryptocurrency Continues
Despite the continued financial challenges, leading businesses worldwide have been increasing their investments in the crypto world. Coinbase has launched a campaign called Crypto 435 to raise awareness of the importance of regulators and legislators acting in the crypto industry’s best interests. Coinbase has also partnered with BlackRock, the world’s largest asset manager, to make it easier for their customers to access crypto assets.
Recent reports have suggested that payment giants Visa and Mastercard are delaying the launch of some crypto-related services until the regulatory framework is improved, and are dropping plans for new partnerships in the crypto sphere because of the high-profile collapses that plague the market. However, Visa’s Head of Crypto, Cuy Sheffield, has denied these claims, saying that “fiat-backed digital currencies running on public blockchains have the potential to play a significant role in the payments ecosystem”.
Bitcoin Breaks Below 50-day SMA
From a technical point of view, BTCUSD has fallen below its 50-day simple moving average (SMA) for the first time since January 3. The focus is now on whether the leading cryptocurrency can reclaim this essential level or extend its pullback.
On the downside, the February support of $21,400 may be the first barrier for the price before the $18,370 area is tested. On the flip side, if buyers return and push the price above its 50-day SMA, initial resistance could be found at the recent rejection point of $25,250. Further up, the bulls may target the $27,960 hurdle.
