The cryptocurrency market has been experiencing a significant downturn following concerns about the solvency of Silvergate Bank. As a result, the total crypto market capitalization fell below USD 1.025 trillion, leading to a sharp sell-off in BTC, ETH, and altcoins.
According to Coinmarketcap data, Bitcoin (BTC), which has the largest market capitalization, was priced at USD 22,359 or around IDR 341.6 million (exchange rate of IDR 15,278 per USD) on Saturday morning.
Although BTC prices had gone up by 0.01 percent in the last 24 hours, they corrected by 3.30 percent on the week. Meanwhile, Ethereum (ETH) was trading at USD 1,571 or the equivalent of Rp. 24 million, with a 0.4 percent increase in the last 24 hours and a 1.87 percent correction in the week.
In February 2023, the cryptocurrency market had a relatively calm month, and the total market capitalization had risen by 4 percent. However, the fear of regulatory pressure seems to be affecting market volatility this month.
Bulls are expected to miss the technical pattern that has guided the total crypto market cap upwards for the last 48 days, according to Cointelegraph, which reported on Saturday (4/3/2023). In mid-January, the market cap was at USD 1.025 trillion, but it broke after Silvergate Bank shares plunged 57.7 percent on the New York Stock Exchange on March 2.
Silvergate provides financial infrastructure services to some of the world’s largest cryptocurrency exchanges, institutional investors, and mining companies. Its struggle with solvency is causing significant ripples in the cryptocurrency market.
“Overall there is no strong sign or sentiment for a bull run in March. Most likely the market will remain sideways in the price range of USD 21,500-USD 25,000,” said a report by the Tokocrypto Research Team.
March: A Bad Month for Crypto
Historical Bitcoin Monthly Return shows that March has never been a good month for BTC and other cryptocurrencies. Many indications of a decline in the crypto market occurred in March in the 2014-2018 period. Additionally, the month of March is high-risk for the stock index’s next decline. Historical data shows that bear markets often pause between quarterly earnings seasons.
“The correlation between the stock market and cryptocurrencies has remained closely linked in recent years,” according to the report. Investors tend to find it difficult to enter the market because they are waiting for the results of quarterly financial reports from several large companies, especially in the technology sector.
The crypto market has been trading along high growth tech stocks since late 2020, surging to unprecedented highs. However, it slowly came crashing down as the Fed started raising interest rates and sucking liquidity out of the market.
Investors should watch out for the US economic calendar, particularly on March 10, where there will be data on Non-Farm Payrolls (NFP), Consumer Price Index (CPI) on March 14, and the FOMC meeting of the Fed to determine interest rate hikes on March 21-22. Strengthening macroeconomic data will disturb The Fed’s hawkish stance, so it is likely to also affect the crypto market this month.