Bitcoin (BTC) fell more than 8% in the past 24 hours to fall below $21,000 for the first time in seven weeks as investors continued to worry about the fallout from the implosion of the crypto-friendly bank Silvergate Bank.
On Wednesday, Silvergate Capital (SI), the bank’s lending-focused parent company, said Silvergate Bank would “voluntarily liquidate” its assets and close operations.
The largest cryptocurrency by market capitalization traded as low as $20,050 on Thursday, its lowest level since Jan. 14, before regaining ground to sit at just over $20,250.
“This remains a challenging environment for the crypto given the fallout from Silvergate Capital, so bitcoin could see additional selling pressure testing the $20,000 level,” wrote Edward Moya, senior market analyst at the market maker. Oanda Foreign Exchange, in a Thursday note.
In the past 24 hours, bitcoin saw over $60 million in liquidations, more than 95% of which were long positions, according to data from Coinglass.
Investors grew concerned and bitcoin’s price began to slide last week when Silvergate said it had delayed filing its annual report and warned of its potential inability to continue as a “business in progress”. activity”.
Moya wrote that the closure of Silvergate Bank underscored the crypto-bank’s lingering problems. He added that “the cryptoverse is now trying to find a new service company to help with payments and other deposit-related services.”
Julius de Kempenaer, senior technical analyst at StockCharts.com, noted in an email to CoinDesk that if more crypto market service providers like Silvergate fall into trouble, it would “make access to crypto more difficult and… would not be very appealing to newcomers”. investors. »
Stefan Rust, CEO of economic data aggregator Truflation, wrote in an email to CoinDesk that the Silvergate crisis will slow institutions’ rate of market entry because “they don’t have an on-ramp and output that is evolving so rapidly”.
“It will also push more crypto businesses overseas,” Rust wrote. “Most, however, will find another on and off ramp they can use to get around this problem.”
Most major cryptos were also in the red recently. Ether (ETH), the second-largest crypto by market value, recently fell more than 8% from the same time on Wednesday to change hands at $1,433.
The ETH price drop also coincided with Thursday afternoon news of the New York Attorney General’s office suing KuCoin, alleging the crypto exchange was offering unregistered securities and commodities. The lawsuit also alleged that ETH, luna, and terraUSD were all securities.
Layer 2 platform Polygon’s MATIC token is down more than 8% in the last 24 hours and 16% in the last seven days to recently trade below $1. SOL, the Solana blockchain token, fell 9% for the day to $17.09. SOL, which had hovered above the $20 range most of this year, has lost 20% in the past seven days.
The CoinDesk Market Index, which measures the overall performance of the crypto market, was down 4.7% for the day and 11.4% for the week.
Stock markets also struggled, with the S&P 500 losing 1.9% on Thursday afternoon.