Key on-chain moves generated resistance throughout the first week of March, dampening Bitcoin traders’ excitement.
Over the course of the week leading up to early February, Bitcoin (BTC) was trading at around $23,500.
Today, the largest cryptocurrency by market cap faces a retest of the $22,000 level, which should benefit short sellers.
Bitcoin price has been fairly stable over the past few weeks, despite struggling to gain traction at $22K in recent months.
Bitcoin is feeling the pressure at the $22K level
Bitcoin price on Monday fell below a key support level around $22,200. At the time of writing, Bitcoin was trading at $22,360, down 4.54% over the past seven days, and with a market cap of $431.7 billion, according to data from crypto market tracker CoinMarketCap.
BTC is down nearly 10% in the past two weeks and 4% in the past 30 days, according to data from Coingecko.
Silvergate concerns mount
In recent days, Bitcoin has traded above $22,400, firmly within the narrow range it has occupied since last week, when traders sold $78 million worth of long bets over Silvergate Capital concerns.
After announcing a 40% headcount cut, the California-based company made a “risk-based” decision to shut down its Exchange network.
Silvergate stated in a filing last week that recent developments, particularly the collapse of the FTX exchange and subsequent regulatory action, had raised concerns about the bank’s ability to “remain as a going concern”.
Other companies, such as Coinbase and Paxos, broke off relations with the bank in the days that followed.
Bitcoin and other cryptocurrencies were relatively unchanged on Monday, holding below previous levels amid concerns that restrictions on crypto-focused institutions could impact markets.
Bitcoin price has been trading sideways for most of the past week as the market continues to process Silvergate and prepare for what is expected to be encouraging economic news out of China this week.
BTC total market cap at $431.6 billion on the daily chart | Chart: TradingView.com
Jeff Dorman, chief investment officer at digital asset investment firm Arca, wrote in a Monday newsletter that the stability of the cryptocurrency market over the past few days suggests that last week’s price drop may have been the result of a single seller (or a small group of sellers) rather than a market-wide panic.
While BTC/USD is consolidating around USD 22,200, a break below USD 22,000 could trigger a more serious correction.
Meanwhile, some analysts continue to predict that BTC will hit $25,000 in the near term, with on-chain data pointing to several drivers for price volatility at higher levels.
– Featured image from VICE