Bitcoin (BTC) investors were dealt a major blow yesterday as the leading cryptocurrency fell below its crucial support level of $22,000. It marks the first time BTC has dipped below this level since February 14th.
The day got off to a bearish start, with BTC reaching a daily low of $21,708.05. Despite a brief uptick, it ultimately closed the day at $21,718.08, signaling that the downward trend was far from over.
However, since yesterday things have only gone from bad to worse. According to the data from CoinMarketCap, BTC is currently trading at $21,666.33 in a bearish market on both a daily and weekly basis.
Over the past 24 hours, BTC has plummeted by 1.92%, and over the previous seven days, it has dropped by a staggering 7.38%. To make matters worse, the 24-hour trading volume for BTC has also fallen by 10.58%, indicating that investor confidence is rapidly dwindling.
While many factors could be contributing to this latest price drop, the recent controversy surrounding Silvergate Bank may be playing a significant role. The crypto-focused bank has been the subject of intense scrutiny in recent weeks, causing market instability across the board.
Silvergate Bank’s parent company, Silvergate Capital Corporation, announced yesterday that it plans to shut down operations and voluntarily liquidate the banking division, which focuses on cryptocurrency.
Bitcoin Exchange Deposits Mirror 2019 Bear Market
Recent data analysis has revealed that Bitcoin deposits on exchanges have been on a steady decline as 2023 progresses, mimicking the bear market trend of 2019.
According to a 14-day moving average (DMA), the number of Bitcoin deposits on exchanges has been steadily decreasing over the last few months.
Interestingly, this trend has been offset by an unprecedented increase in Bitcoin withdrawals since the FTX collapse. It is the first time in the history of Bitcoin that withdrawals have exceeded deposits, a fact that has piqued the interest of market analysts and traders alike.
Despite this trend, the gap between deposits and withdrawals is slowly closing, and market experts predict that the two will soon reach a state of equilibrium.
The surge in Bitcoin transactions can be attributed mainly to the rising popularity of Ordinals, which has attracted a significant number of users.
While the decline in exchange deposits may be cause for concern for some investors, the increase in transaction count and the unique situation of withdrawals exceeding deposits provide an interesting perspective on the current state of the Bitcoin market.
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