Bitcoin (BTC) struggled to recover support at $20,000 during the March 10 Wall Street open as fears mounted over contagion from Silicon Valley Bank (SVB).
The trader targets a BTC price of $18,000
Data from Cointelegraph Markets Pro and TradingView tracked BTC/USD as it suffered further losses, hitting $19,569 on Bitstamp.
The pair had seen another drop ahead of the open as struggling SVB Financial saw a further 60% wiped from its stock price.
In a move that mimicked crypto exchange banking partner Silvergate, SVB also began triggering ripple effects for non-US banks that day.
For Cointelegraph contributor Michaël van de Poppe, founder and CEO of trading company Eight, the writing was on the wall.
“It was Silvergate first, then Silicon Valley Bank and now First Republic Bank. All flowing massively through the markets. It’s 2008 again,” he said. summary.
With that, US stocks started the March 10 session in the red as nervous traders waited to see the full extent of the SVB contagion.
“Silvergate and Silicon Valley apparently invested in low-yielding Treasuries before the Fed’s tightening cycle…treasuries that no one would want to buy now with ‘risk-free’ 5% Treasuries directly from the government,” is among trader and analyst Scott Melker’s comments. declared.
“They were forced to sell at a very favorable price, registering massive losses. This further undermines market confidence, causes more withdrawals and leads to insolvency.
Melker said the setup was a “slippery slope”.
In terms of BTC price action, van de Poppe, meanwhile, was eyeing levels as low as $18,000 for a potential long entry. Above $20,000, on the other hand, the opportunity was now short.
Commentators see Fed pivot pressure increasing
A silver lining came in the form of what markets commentator Holger Zschaepitz describe as “mixed” US jobs data, helping to allay fears of a major policy shift from the Federal Reserve.
Related: Why is the price of Bitcoin falling today?
“Traders are now pricing in a 25bps hike from the Fed in March following today’s jobs data. Previously, 50bps was priced,” popular analyst account Tedtalksmacro added on Twitter, too call the data a “mixed bag”.
CME Group Data FedWatch Tool confirmed the reversal of market expectations for the next meeting of the Federal Open Market Committee (FOMC) scheduled for March 22.
For some, however, the scale of the SVB crisis was reason to believe that the Fed would have no choice but to abandon its monetary tightening and “pivot” on interest rate hikes.
“SVB are facing a full run on the bank. The bad news is that it will accelerate very quickly towards a systemic crisis,” said crypto entrepreneur David Bailey. reacted.
He added: “The good news is that the Fed will have no choice but to pivot imminently or risk imploding the entire financial system.”
The views, thoughts and opinions expressed herein are those of the authors alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.