Bitcoin and Ethereum have fallen below 21,000 and 1,500, respectively, with many other cryptocurrencies also falling, resulting in a four percent decrease in the overall market cap, which is below one trillion dollars. The crypto market is experiencing a lot of liquidations, with approximately $75 million in the last hour, and most of it is being used for long liquidations. Although the overall market is falling, it is still above the psychological area of support of 20,000. Furthermore, there has been a coordinated effort by government entities to harm the crypto industry, as shown by the forced liquidation of several crypto firms, including Silvergate. Meanwhile, Signature Bank is quickly becoming the new bank for crypto entities, but 90% of their deposits are not FDIC insured. While there are negative aspects of the falling market, there are also some positives, such as several positive rulings by the SEC.
Cryptocurrency Market Drops, Bitcoin and Ethereum Take a Hit
The cryptocurrency market has taken a hit recently, with Bitcoin and Ethereum falling below $21,000 and $1500, respectively. The overall market cap is down 4%, with the industry falling below the trillion-dollar mark. But what is causing this dip, and should investors be worried or see it as a buying opportunity?
Bitcoin Drops Below $21,000
Bitcoin, the most popular cryptocurrency, has dropped below $21,000 after breaking support at $21,300 and $21,500. While it is still holding above $20,000, which is another psychological area of support, a fall below this could lead to further downside.
Market Influence and Liquidations
Market drops are not isolated to cryptocurrency, with the Nasdaq down 1.23%, the S&P down 1%, and the Dow Jones down 0.79%. Crypto liquidations have also been happening, with $75 million in liquidations in just the last hour in the crypto market, and $159 million in the last 24 hours, primarily being Bitcoin long liquidations.
Operation Choke Point and the Future
Operation Choke Point, a coordinated effort in different government entities to choke off the crypto industry, is having a direct impact on the industry, with companies such as Silvergate and Signature Bank feeling the effects. Silvergate is down 21.5% after announcing it will be liquidating its portfolio, while Signature Bank could see dwindling deposits due to its connection with cryptocurrency.
The Good News
While the market is taking a dip, there are still some positives. The Mountain Cox registration deadline has been pushed back another month, allowing creditors to file claims until April 6. Additionally, the SEC has lost a case against Binance US and may lose one to Grayscale, which has the potential of opening up their ETF to spot.
Overall, while the dip may cause some short-term concern, it is not necessarily a reason to worry. Investors should continue to dollar cost average, and those looking for a buying opportunity should consider purchasing Bitcoin and other cryptocurrencies at a discount. Keep in mind that the crypto market is still in its early stages, and there will be volatility and fluctuations along the way.