It's a really tough time on cryptocurrency market as Silvergate Bank is in trouble and Binance is said to be struggling as well. Last week Bitcoin declined noticeably, what does Alex Kupstikevich adress that decrease to?
Alex Kuptsikevich (FxPro): Bitcoin fell last week due to the problems at Silvergate Bank, which plays a significant role in cryptocurrency payments. Interestingly, the catalyst for the crypto market was not the news itself but a wave of cryptocurrency exchanges refusing to deal with the troubled bank. The fragility of the cryptocurrency market was once again in the spotlight for players, with bitcoin plunging more than 6% at one point in thin trading on Friday. Since then, the first cryptocurrency and the crypto market have performed with subdued volatility.
This is both good news and bad news. The good news is that we haven't seen a chain reaction in the market. Investors and traders in the market have started to separate cryptocurrency companies and individual coins very strongly rather than transferring the problems of the former to the latter's price. It is also worth noting that the bitcoin price is consolidating above the local lows of February. This is a sure sign of buying interest in a downturn.
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The bad news is that cryptocurrencies missed out on the latest mini-rally in the US stock market, and their limited range in recent days indicates a wait-and-see attitude.
The technical analysis on the longer timeframes also needs more hope for the bulls. Bitcoin tested the 200-week average in February but failed to break above it, and now the falling 50-week average is acting as a local resistance line. If the price remains below it ($23.7K), it is premature to bet on a rapid rise in the crypto market.
