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(Kitco News) - Crypto prices were hammered in trading on Thursday as the announcement that Silvergate Bank would be winding down operations and the threat of higher interest rates pushed many traders to head for the exits and the safety of stablecoins until the latest turmoil blows over.
Stocks, likewise, faced downward pressure in the afternoon after climbing higher in the morning session on the back of weak initial claims data as investors opted to take a more cautious approach to the market ahead of Friday’s key February jobs report. At the market close, the S&P, Dow and Nasdaq all finished the day lower, down 1.85%, 1.66%, and 2.05%, respectively.
Data provided by TradingView shows that Bitcoin (BTC) bears held nothing back in their onslaught on bulls, hammering the top crypto below support at $21,000 and looking as though they are determined to break the back of support at $20,000.
BTC/USD 4-hour chart. Source: TradingView
Prior to the afternoon selloff, Kitco senior technical analyst Jim Wyckoff noted the possibility of such an outcome, saying “Bears have gained the slight near-term technical advantage amid a fledgling price downtrend in place on the daily bar chart.” Wyckoff added that “Bears still have some momentum to suggest more sideways-lower trading in the near term.”
Eight Global CEO Michaël van de Poppe – who noted that “The amount of negative news in the past few hours is record-breaking” – highlighted the area of $20,400 as a potential spot to open a long position prior to the afternoon drawdown.
This scenario is playing out for #Bitcoin.
— Michaël van de Poppe (@CryptoMichNL) March 9, 2023
Taking the low, tons of liquidity beneath that level getting taken, hence the acceleration on specifically #Bitcoin and #Ethereum.
Could take $20.4K low as well and then we're there, as bears will get euphoric.
RSI full reset. pic.twitter.com/MLyuWyPJ8r
Following the pullback, Poppe observed that “Almost a month ago people wanted to get into Bitcoin, and rushed over each other,” but are now running for the exits since the price has dropped 20% since then. According to Poppe, this “is the time you should start accumulating, and not when things have been rallying massively. Countertrade your emotions.”
And a call of calm was issued by market analyst Rekt Capital, who reposted the following tweet from last Friday, which highlighted the possibility of a correction below $20,000. While such a move would still leave BTC in the macro range it's been trading in for a while, Rekt Capital warned that BTC still faces a possible macro downtrend in the coming weeks.
#BTC rejects from the confluent resistance that is the Range High and Macro Downtrend$BTC is now dropping into the Range Low as part of its consolidation
— Rekt Capital (@rektcapital) March 9, 2023
BTC could still face the Macro Downtrend in the coming weeks, provided that this Range continues to hold#Crypto #Bitcoin pic.twitter.com/xEzyc7WWWF
Altcoins get demolished
The altcoin market was obliterated as Bitcoin price plunged, with a large number of tokens in the top 200 experiencing double-digit losses in excess of 15%.
Daily cryptocurrency market performance. Source: Coin360
The hardest hit tokens include Huobi Token (HT), which fell 28.88%, a 20% decline for FLOKI (FLOKI), and a 15.77% pullback for Onyxcoin (ONX).
The overall cryptocurrency market cap now stands at $940 billion, and Bitcoin’s dominance rate is 41.7%.
