Bitcoin Dips Below $20K Amid Wave of Crypto Negativity

Silvergate Liquidation, Extra Tax for Miners, KuCoin Lawsuit.

Despite a stellar start to 2023, Bitcoin’s recovery is once again stifled by the collapse of a crypto giant: Silvergate announced voluntary liquidation. The crypto-friendly bank Silvergate announced earlier this month that it is facing financial difficulties and several of its partners were quick to cut ties.

Earlier this week, Silvergate announced that it had entered voluntary liquidation, sending a shockwave across the crypto space. Some of Silvergate’s most prominent clients were Coinbase, Circle, Bitstamp, Galaxy Digital, and Paxos.

Another important player on the crypto scene is dealing with headwinds: the crypto-exchange KuCoin. On March 9, the New York Attorney General’s office filed a lawsuit against KuCoin for “failing to register as a securities and commodities broker-dealer and falsely representing itself as an exchange”. Attorney General Letitia James aims to prevent the company from operating in New York, directing KuCoin to use geo-blocking measures to stop clients from accessing its services. She also claims that Ethereum is a security alongside Terra and TerraUST.

To add more fuel to the fire, it looks like crypto miners could end up paying an extra 30% tax on the electricity they use. Only United States miners would be affected as the information comes from a Biden budget proposal for 2024.

Chart Analysis – BTC/USD

Bitcoin is currently changing hands at $19,950 after reaching a low of $19,791. The pair has breached the previous low, thus setting the stage for a possible downtrend or at least an extended period of bearish movement.

The Relative Strength Index has just moved below its 30 level, so it is possible to see a relief retracement. The level at $20,000 is a very important one and it will be difficult to be broken when the pair is already oversold (or close to it). That’s why it is fairly probable that we will see a bounce higher.

It’s also worth taking a look at the Bollinger Bands: they are moving in opposite directions, indicating that momentum is growing. However, the pair is at the lower band, which combined with the support at $20K and the RSI position, could trigger a bounce higher.

The NFP report is due later today, together with the Average Hourly Earnings and the Unemployment Rate. This cluster of events could easily affect BTC/USD, reversing its direction or adding more steam to the bears’ assault.