Bitcoin price is down today after Silvergate bank liquidity concerns combine with an exchange margin cascade, pressuring crypto markets.
The Bitcoin price is down today as cryptocurrency markets react to fresh FTX fallout and BTC bulls fail to defend already weak support. Bitcoin fell 5% in a single hour overnight into March 3, dropping to its lowest levels in over two weeks, data from TradingView shows.
The biggest crypto asset followed Ether and other significant altcoins in a rapid decline driven primarily by worries over Silvergate bank. Experts are still awaiting the outcome of the move after BTC/USD held $22,000 as support. Some argue that Bitcoin is still due for a further retracement while some call for calm.
As traders lose their bets on the price of Bitcoin and other cryptocurrencies moving higher in the last 24 hours, the market nosedive resulted in a massive amount of liquidations. According to coinglass data, long order liquidations account for 92.48% of total liquidations.
74,469 traders around the cryptosphere liquidated their long orders in just 24 hours, bringing the total amount liquidated to $231 million, the highest figure recorded within the past month.
The Silvergate bank is the key discussion topic and source of agony for Bitcoin bulls. Many of the most well-known companies in the cryptocurrency industry’s past banking partners have started to scale back or end their relationships with Silvergate due to concerns that it may be “less than well capitalized.”
These statements were made by the bank itself, which this week postponed filing its annual 10-K report in a filing to the United States Securities and Exchange Commission (SEC).
Coinbase, a U.S. exchange, revealed that it has ceased utilizing Silvergate as a result of the adjustment, and Crypto.com soon followed. Circle, a leading stablecoin, subsequently said that it was “sensitive to the concerns regarding Silvergate” and that it was “in the process of unwinding certain services with them.”
The incident is the most recent in a long-running scandal that started with the collapse of the exchange FTX, to which several crypto companies had a sizable exposure.
Bitcoin managed to avoid substantial damage despite the parent business of Silvergate, Silvergate Capital (SI), saw its shares fall by roughly 60% to record lows.
The potential collapse of a major banking institution such as Silvergate has raised concerns about the stability of the financial system as a whole. Some have argued that this kind of event is not unique to Silvergate and that any bank, regardless of its size or reputation, could be vulnerable to a similar fate.
There is an increased emphasis on the principle of being your own bank and taking control of your financial security through decentralized choices like cryptocurrencies.
While the idea of being one’s own bank may seem daunting to some, it is increasingly being seen as a viable option for those who wish to protect their financial assets from the risks associated with centralized banking institutions. By embracing decentralized options such as blockchain technology, individuals can take control of their finances and reduce their dependence on traditional banking systems.
This approach also offers greater transparency and security, as well as the potential for increased returns on investments, making it an attractive option for those looking to safeguard their wealth in an increasingly uncertain financial landscape.