The collapse of two American banks – Silicon Valley (SVB) and Silvergate – launched one of the largest financial market crashes.
The history of Silvergate, actively used by the largest US cryptocurrency exchanges, lasted from the beginning of March and ended yesterday with the closure of the bank. Silicon Valley is more recent news.
On the evening of March 9, it became known that SVB Financial Group (SIVB) sold securities from its portfolio in the amount of $21 billion due to liquidity problems, as a result of which SIVB shares fell by more than 60%.
Michael van de Poppe, head of trading firm Eight commented event:
Silicon Valley bank is about to collapse, which is directly related to the policy of the Fed [по повышению ставки]. This is the first sign that we are entering the biggest crisis since 1929.
Bitcoin began to fall last night and at the time of publication it had reached almost 9%. According to the Cryptocurrency Screener Cryptovizorwhich determines the market price of BTC/USD based on the results of trading on the largest spot exchanges, the minimum price of the asset was $19,768.
Trader Crypto Tony, who successfully opened a short position on bitcoin, suspectsthat the fall has not ended:
Made a profit in the lower part of the range due to the collapse in the Asian session. If you didn’t get in on time, then a test of $20,200 from below could be a good opportunity to re-short.
Van de Poppe looks on the situation on a larger scale:
Markets are collapsing, which means that the story of pausing or reversing Fed policy is taking on the character of a V-shaped reversal. <…> Apparently, assets will continue to fall in anticipation of quantitative easing.
So, the US Federal Reserve “played out” with the increase in the rate to the point that banks began to have problems with liquidity. As it turned out, not only for cryptocurrencies. Van de Poppe believes that the Silicon Valley crisis will lead to the fact that the Fed will be forced to make decisions to cut rates. Bitcoin will respond to this with a V-shaped reversal, similar to how it did in March 2020 during the coronavirus crisis. It remains to find the bottom.
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