- Bitcoin price tanks more than 9% in a span of 24 hours to trade at $19,779.
- Biden’s new crypto mining tax policy and the collapse of Silvergate bank added to investors’ panic.
- BTC stares at 22% declines to $15,500.
Bitcoin price trades below $20,000 for the first time since January 13. This followed the latest news from the crypto-friendly bank Silvergate and President Biden’s proposed budget. Data from TradingView and CoinMarketCap shows that the price of the big crypto slipped to $19,694 on Friday before recovering the current price of $1,9779.
Bitcoin, which had a solid start to 2023, had fallen 13.7% since March 3, when uncertainties around Silvergate bank began. The price has been struggling with recovery since then.
March 8’s announcement that Silvergate Bank, one of the central banks in the United States offering banking services to crypto companies, had entered into voluntary liquidation has come out as a trigger for the bloodbath currently being witnessed in the digital currency market.
In addition, the proposed supplementary budget by the President of the United States, Joe Biden’s administration, to subject a 30% tax on electricity costs incurred by crypto miners is adding fuel to the sell-off. This is aimed at “reducing mining activity” within the US.
As a result, Bitcoin has dropped more than 9% to trade below $20,000. The second largest crypto by market capitalization, Ethereum, has dropped to $1,384, down 9.82% on the day. Other top-cap cryptos followed suit, with Solana and Dogecoin emerging as the biggest losers after declining 12.1% and 10.93%, respectively.
The global crypto market has seen more than $88 billion wiped from its value after sliding below the $1 trillion mark to $914.72 billion, down 8.07% on the last day.
Bitcoin Price Is On A Downward Spiral
After sustaining three days of undecidedness, BTC broke down on Tuesday, with the sell-off intensifying on Thursday night as the most prominent cryptocurrency in the world fell to a two-month low. The increasing uncertainty around the future momentum of crypto has further fueled the panic selling resulting in a drawdown in BTC price.
Bitcoin price was teetering around $19,780 at the time of writing. The flagship crypto fell from $23,000 on Tuesday to lows just above $19,700 on Friday to mark a 13.70% drop. In the same span, BTC lost its support of $22,000 and its critical foothold at $20,000.
The Bitcoin price now seeks support from traders and investors who may wish to buy the dip, pulling it out of its current conditions. The Relative Strength Index (RSI) has entered the oversold zone and is positioned at 25. This zone is usually an indicator of a change in trend, which could push the Bitcoin price back up.
However, bulls would be required to reclaim $21,400 as a support floor, enabling the digital asset to rise toward the significant resistance at $23,000. This would mark a 16% rise from the current level and allow BTC to tag the year-to-date highs above $25,000.
BTC/USD Daily Chart
On the other hand, the RSI reinforced the bear’s grip on Bitcoin. In addition, the downward movement of the Moving Average Convergence Divergence (MACD) indicator suggested that the market favored the downside. Notice that the call to sell BTC, sent on February 23 when the MACD line (blue) crossed below the signal line (orange), was still in play, adding credence to the gloomy outlook.
As such, the decline may continue resulting in a big crash for the pioneer cryptocurrency. The increasing overhead pressure could pull BTC toward critical support at $18,300.
Breaching this level would invalidate the bullish narrative, and Bitcoin would revisit November lows around $15,500.