Bitcoin, the world's leading cryptocurrency, suffered a significant drop, reaching its lowest value in two months. Ether, the second most valuable cryptocurrency, followed a similar path and also saw a decline in value.
On March 10, Bitcoin briefly dipped below €20 for the first time in almost two months, hitting a low of €000.
The drop in cryptocurrency prices can be attributed to a variety of factors, including comments by US Federal Reserve Chairman Jerome Powell, Joe Biden's budget proposal, and the recent closure of Silvergate Bank.
As a result, the fall in cryptocurrency prices worries investors and the industry in general. Furthermore, the fact that the total market capitalization of all cryptocurrencies has fallen below €1 trillion is a clear indication that the market as a whole is having a difficult time.
The collapse of Silvergate Bank and its impact on the crypto industry
The recent closure of Silvergate Bank is considered one of the main reasons for the fall in cryptocurrency values. The bank has played a crucial role in servicing crypto businesses in the United States. Therefore, its closure could have a significant negative impact on the crypto industry.
In fact, the closure of Silvergate Bank could hinder the development of the cryptocurrency industry, since it provided essential banking services to these companies.
The bank's suite of services, such as custody, wire transfers, and escrow, were essential to many cryptocurrency businesses. Without that support, it could be difficult for these companies to find other banking partners that offer similar services, which could ultimately hinder the growth of the sector.
US crypto miners could face a 30% tax on electricity costs
The publication of an explanatory document on the supplementary budget on March 9 was another factor that contributed to the fall in the price of Bitcoin. The document revealed that as part of a Biden budget proposal to “reduce mining activity,” US crypto miners could face a 30% tax on electricity costs.
If implemented, this proposal could have a significant impact on the crypto mining industry, as it is highly dependent on low electricity costs. A reduction in mining activity in the United States could have negative implications for the entire crypto market.
Crypto Market Capitalization Drops Below €1 Trillion
The substantial decline in the price of Bitcoin has significantly affected the entire crypto market, once again driving the global crypto market capitalization below €1 trillion.
Other widely used altcoins such as Ethereum, Dogecoin, and Litecoin also suffered substantial losses across the board.
This indicates that the cryptocurrency market remains volatile and subject to unpredictable fluctuations, as evidenced by the current difficult times for global crypto values.
Impact of US Fed Chairman's Comments
Jerome Powell's statements on inflation and interest rates had a significant impact on the cryptocurrency market. His recent announcement that the central bank may start raising interest rates sooner than expected sparked investor concerns about the potential impact on the economy and cryptocurrencies, driving down cryptocurrency prices.
Powell's comments continued to negatively impact the cryptocurrency market for the second day in a row, adding to pre-existing worries and concerns about the regulatory environment and the future of cryptocurrencies.
bitcoin price
The current live price of Bitcoin is €19,938, with a 24-hour trading volume of €43 billion. During the last 24 hours, Bitcoin has decreased by 8,50%. It is currently ranked #1 on CoinMarketCap, with a live market capitalization of €385 billion.
Bitcoin technical analysis indicates a strong downtrend for the BTC/USD pair as it broke above the double bottom support level of €20,350. Bitcoin's immediate support level is €18,430. A break below this level can intensify the selling pressure, leading to a further drop towards the €16 level.