• The U.S. government has moved around $1 billion in BTC to Coinbase, sparking speculation of a possible dump.
• Cryptobank Silvergate is on the brink of bankruptcy and the U.S. Federal Reserve is becoming more hawkish with anticipations for larger rate increases.
• If the BTC dump were to happen, it could possibly retest its $20,000 resistance zone.
U.S Government Moves $1B in Seized BTC
The U.S government recently moved around 40,000 seized Bitcoin (BTC), which is valued at approximately $1 billion, to Coinbase from wallets associated with law enforcement seizures according to blockchain intelligence and data platform Glassnode. Of these funds, 9,861 BTC were seized from the Silk Road hacker raising speculations that a BTC dump might be incoming soon as market participants are already trading down 1.4% on the day due to this news.
Cryptobank Silvergate Bankruptcy & U.S Federal Reserve Rate Increases
The crypto markets have had an optimistic start to the year with most coins and tokens going up significantly since January but have become increasingly challenging in recent weeks as Cryptobank Silvergate teeters on the brink of bankruptcy and as the U.S Federal Reserve turns hawkish anticipating larger rate increases with a current Federal Funds Rate at 4.57%.
BTC Resistance Zone Retest?
The possibility of a dump has left many worrying about whether BTC will once again experience retesting its $20,000 resistance zone if such a dump were to occur especially with Fed Chairman Jerome Powell testifying Tuesday that further rate increases may help curb inflation leading some futures predicting a 53% chance of a 50 bps rate hike by March end resulting in rates potentially reaching 6%.
Crypto Markets Impacted By News
The news of Silvergate’s financial troubles last week sent shockwaves through out crypto markets wiping out billions within minutes causing Bitcoin (BTC) alone to drop 5% while other altcoins followed suit experiencing dumps as well due to this news adding onto investors worries even further despite the optimistic start this year had brought them so far regarding their digital assets investments..
Conclusion
Given all these economic factors playing into effect it will be interesting to watch how cryptocurrencies react in terms of prices over the coming days and weeks given that they have been an unpredictable asset class thus making it difficult for market participants and investors alike when trying to predict price movements based off current news events circulating throughout media outlets today