• The recent decline in Bitcoin (BTC) was initiated by concerns surrounding the crypto-friendly bank Silvergate (SI), causing the removal of bullish leverage from the futures market.
• Currently, there is a widespread belief that the appreciation of the U.S. dollar against other major global currencies will have an adverse effect on Bitcoin.
• On-chain data from IntoTheBlock reveals that Bitcoin has fallen below a significant demand zone at $23,000, and may potentially retest levels below $20,000 if it doesn’t pass $23,700 in resistance.
Sharp Decline Of Bitcoin Leaves Investors In Despair
Bitcoin’s sharp decline was caused by concerns surrounding the crypto-friendly bank Silvergate (SI), which led to the removal of bullish leverage from the futures market. According to Glassnode’s data, exchanges liquidated longs or bullish Bitcoin futures amounting to more than $62 million during Asian hours – this was the largest sum since August 2020 and also saw short liquidations worth just over $500,000.
US Dollar Appreciation To Affect Bitcoin Price?
Investors are concerned that increasing uncertainty over inflation due to hotter-than-anticipated economic data released in February and a potential rebound in US stock markets may result in an appreciation of US dollar against other major global currencies – which could have an adverse effect on Bitcoin prices.
Bitcoin Below Significant Demand Zone At $23,000
On March 3rd , On-chain data revealed by crypto analysis platform IntoTheBlock showed that Bitcoin had fallen below a significant demand zone at $23,000 and created a robust downward momentum – potentially retesting levels below $20,000 if it can’t pass its current resistance at $23,700.
Will BTC Make A Comeback?
Despite this bearish trend and investors’ pessimism towards cryptocurrency companies and banking issues – signs of resilience remain suggesting that there may still be hope for a potential reversal in BTC price if it surpasses its current resistance level at $23700.
Cautiousness Advised Until New Data Release
Until further economic data is released or until after the United States Federal Reserve meeting scheduled for March 2021; investors are advised to remain cautious when investing in cryptocurrency assets such as Bitcoin due to their volatile nature.