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Bitcoin was progressively showing bullishness and gained the confidence of several investors, but this recent drop could create unnecessary fear amongst those who have invested. 2023 has been a good year for the crypto market since it recovered quite significantly from the crash in 2022 and showed healthy signs of bullishness.
It would be very interesting to see how the market moves from here. Bitcoin’s prices were at around $23,500 and it quite instantly dropped by a $1,000 dollars to $22,500. There are multiple reasons behind the drop in value, and bearishness can be expected for some time.
Such unpredictable instances can benefit and damage the economy in many ways.
Increase in interest rates affects bitcoin
One of the main reasons behind the drop is due to a hike in interest rates, and it is also an impact of positive progression in the US economic figures and statistics.
The Federal Reserves may even have to hike interest rates to battle against inflation and other reasons, which could potentially decrease the value of cryptocurrencies worldwide.
45% share value dropped for silvergate bank
The market value of bitcoin has decreased by $22 billion dollars and much of it has to do with the Silvergate capital, a crypto bank.
With the closure of coin base cryptocurrency exchange services, the shares of silvergate dropped by 45% and announced that it needed more time to submit the 10k annual report to the US Securities and Exchange Commission.As a result of multiple factors, the cryptocurrency market has taken a significant dip where in most cases, the previous support levels are now resistance levels.
Bitcoin prices may consolidate for a while or even drop lower; it all depends on fundamental and technical reasons. Based on candlestick analysis, if bitcoin breaks the support level of $21,500, chances are that it may drop even further.
These values were last observed in mid-February. This unexpected drop may raise many concerns; however, an optimistic approach to such conditions will enhance decision making. (Photo credit: QuoteInspector.com)