Crypto Weekly: 6 – 12 March 2023
Silvergate announced that it does not expect to submit its report on the 2022 fiscal year by the 16 March deadline. Shares of the crypto-focused bank have plummeted as a result, with prices down 95% over the past year. This decline is likely a byproduct of the yearlong bear market that the crypto industry is still weathering, which has seen the collapse of major companies like FTX CeDeFi platforms like BlockFi.
Additionally, several crypto firms have announced they will scale back or outright terminate their relationship with Silvergate Bank, including Coinbase, Paxos, Crypto.com, Circle, and Bitstamp. This news has caused a significant degree of fear and uncertainty amongst investors in the crypto space.
Furthermore, Silvergate Bank announced that it is discontinuing Silvergate Exchange Network (SEN), its digital assets’ payment network, claiming the termination is a “risk-based decision.“ At the time of writing, other deposit-related services remain operational. Additionally, US Judge Michael Kaplan has ruled that Silvergate Bank must return the $9.9 million deposited by BlockFi.
The Ethereum blockchain has deployed ERC-4337, a feature commonly referred to as “account abstraction,” which can be seen as an enhancement that could make it easier for users to recover their crypto if they lose private keys to an online wallet. The ERC-4337 upgrade smart contract is EVM-compatible, meaning it can be deployed anywhere that is EMV-compatible including networks like Polygon, Optimism, Arbitrum, BNB Smart Chain, Avalanche, and Gnosis Chain
Visa’s Head of Product Cuy Sheffield has publicly denied reports by Reuters that claimed that Visa will cease partnering with crypto firms, with Sheffield tweeting that despite volatility and challenges in the market, Visa intends to continue to partner with crypto companies to improve fiat on and off ramps as well as progress on Visa’s product roadmap to build new products that can facilitate stablecoin payments in a secure, compliant, and convenient way.
Brazil-based digital bank Nubank has issued 100 billion Nucoin on the Polygon chain for its 70 million customers. Nucoin will work as part of a customer loyalty program and is granted to clients as bonuses to be used within the bank’s ecosystem, with Nucoin not being allowed for withdrawal to third-party wallets. While there will be no secondary market for Nucoin, users will be able to use it within the ecosystem of Nubank itself and other companies that will partner with it to join the ecosystem in the future
Sebastien Borget, Chief Operating Officer of The Sandbox, stated that he believes the future of the metaverse lies in the hands of individual creators, not the corporate brands that are looking to capitalize on the recent Web3 buzz. Borget believes that the metaverse will see a significant influx of individual creators and content within the next 1-2 years. Borget also highlighted that The Sandbox plans on orchestrating its ecosystem growth through more community-focused curated events and the creation of a Sandbox DAO, which is expected to happen by the end of this year.
Data from CoinGecko revealed that USDT’s market share among stablecoins surpassed the 54% mark on Monday, its highest level since November 2021 during the most recent crypto bull run. Tether’s return to stablecoin dominance can be largely attributed to the rapid decline of its rival, BUSD, which has been on a decline since its issuer Paxos announced that it would halt the minting of additional BUSD due to regulatory pressure.
Weekly Technical Analysis: 6 – 12 March 2023
Bitcoin (BTC)
After facing a sharp sell-off at the end of the week BTC’s trend remains directionless. Keep a close eye on support at $21,500, if support cannot remain intact it is less likely that BTC can manage a recovery. Short-term resistance is set at $23,000; however, even if prices recover somewhat the risk of a sharp correction remains so traders are advised to exercise great caution.
Ethereum (ETH)
ETH faced a similar sell-off to BTC and its trend remains uncertain. There is a critical support level of $1,400. To sustain hopes of a rally, ETH will have to refrain from creating lower lows. ETH has an initial resistance at the $1,800 level, with subsequent resistance at the $2,000 mark after that.
Ren (REN)
REN is up by +32.6% over the past week and is attempting to cement its uptrend. If REN sees a correction, the market may start buying in around the 3.80 baht support level. If REN can sustain its rally, it will look to challenge its resistance at the 5.20 baht level.
Maker (MKR)
MKR is up by 17.6% over the past week and has maintained its positive performance from the week before. MKR has consistently lifted its lows and is creating higher highs. Traders looking to enter an MKR position may consider a Buy on Dip strategy, with support and resistance set at 28,000 baht and 36,000 baht, respectively.
Trading and Investment Considerations For The Week
Negative factors pressuring the market heading into this week include the US SEC signaling that they intend to take a more aggressive regulatory stance towards crypto in addition to signs that major crypto-focused bank Silvergate Bank may soon be forced into bankruptcy as
fallout from FTX’s collapse. Silvergate Bank transacts with many major US-based exchanges and its bankruptcy is likely to be detrimental to the crypto market.
Despite this, the market has likely already absorbed the news of Silvergate’s potential bankruptcy, evident in Silvergate’s share prices dropping by 95%, suggesting that any market correction coming out of the collapse has already taken place. An official announcement of Silvergate’s bankruptcy is unlikely to have a direct significant impact on the market but could potentially negatively influence trader sentiment, leading to a decline in trading volume.
This week on 7 March (10:00 PM GMT+7) keep an eye on Jerome Powell’s testimony before the US Senate Banking Committee wherein the FED chair will address current economic conditions and potential policy direction moving forward. Powell’s statements could help influence the direction of the US dollar as well as the prices of various assets, including crypto.
Additionally, on 8 March (10:00 PM GMT+7) Powell is scheduled for another speech to the House Financial Services Committee. Other than the FED Chair’s upcoming speeches, US unemployment figures are scheduled for release on 10 March at 8:30 PM (GMT+7) and are expected to come in around the 3.4% mark.
70% of investors surveyed are expecting the FED to raise interest rates by 0.25% at next week’s FOMC meeting, with 30% of investors anticipating a 0.50% hike. If Powell’s speeches hint at an increasingly hawkish stance by the FED, this would likely signal support for the likelihood of an upcoming 0.50% rate hike, likely having a negative impact on the market. This week the market is expected to be particularly volatile.
Disclaimer:
-Cryptocurrency and Digital tokens are highly risky; investors may lose all investment money. Investors should study information carefully and make investments according to own risk profile.
– Past Returns/Past Performance does not guarantee future returns/performance.
*Materials on Bitazza Weekly Newsletter are intended to be used and must be used for informational purposes only. The views, information, or opinions expressed are solely those of the individuals involved and do not necessarily represent those of Bitazza and its employees. The information contained herein is not intended to be a source of advice or financial analysis with respect to the material presented, and the information and/or documents contained in this website do not constitute investment advice.
Sources:
https://cointelegraph.com/news/silvergate-closes-exchange-network-releases-9-9m-to-blockfi/
https://cointelegraph.com/news/visa-and-mastercard-halt-new-crypto-partnerships-report/
https://u.today/polygon-matic-helps-brazilian-digital-bank-launch-nucoin-crypto-heres-curious-thing
https://www.theblock.co/post/215900/the-sandbox-sebastien-borget-future-corporate-partnerships
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