Bitcoin Volume Takes A Hit in the wake of Silvergate’s Collapse: Can It Bounce Back?
Bitcoin traders are taking a breather as the market digests the collapse of Silvergate Bank, one of the major fiat payment rails in the crypto market. The bank culminated in its “voluntary liquidation” on Wednesday U.S. time, which has resulted in a significant drop in Bitcoin volume over the past 24 hours.
According to CryptoQuant data, transfer volume, denominated in BTC, is down 35% during this same time period. The total number of transactions on the Bitcoin blockchain has also dropped by 17%, and the number of active addresses has fallen by 10%.
Bitcoin Trading Volume Dwindles
For the month of March, bitcoin trading volume has come in at an average of around $25 billion, compared to around $36 billion for the month of February, according to data from CoinGecko. Guilhem Chaumont, CEO of Paris-based market maker and brokerage Flowdesk, reportedly told CoinDesk that:
“coupled with the drop in the price of bitcoin, we have seen a noticeable drop in trading volumes too, across the ecosystem when news about Silvergate’s financial difficulties broke.”
Silvergate’s Collapse and the Shift to Stablecoins
Silvergate was a major fiat payment rail in the crypto market, offering traditional banking services to exchanges and market makers. As such, trading volumes have dwindled since Silvergate’s problems became public.
With the death of Silvergate, stablecoins will likely become even more ubiquitous among traders. Analysts at Paris-based crypto data provider Kaiko noted, “rather than deposit your dollars with an exchange, you deposit them with a stablecoin issuer, receive stablecoins, and then transfer those to an exchange.”
What’s Next for Bitcoin?
Most of the trading volume is already concentrated in USDT pairs. Data tracked by Kaiko show BTC/USDT pairs account for over 90% of the trading volume, up from 3% in 2017. BTC is currently worth $21,690 at press time, and the price has recently dropped below the neckline after forming a bearish three-drives reversal pattern. The following support levels for BTC are $21K and the 200-day moving average, standing at $19.7K.
According to Chaumont, trading has since then been quiet, and the first shock has been priced in while traders digest the situation. He suggests that the market is not shaking it off, but the situation can still go either way, meaning that if news about a reassuring resolution came, the confidence that characterized the first two months of 2023 could return.
Polygon Bulls Wake Up, MATIC Price May Surpass $1 Any Time From Now!
Polygon price appears to have received the required push as popular exchange Robinhood adds support to the network. In a recent update, one can easily send & receive MATIC on the Polygon network in addition to the existing Ethereum network. The MATIC price spiked high with the announcement and continues to range high aiming to test the crucial resistance above $1.
The MATIC price was silently attempting to break out from the large consolidation, soon after facing a rejection close to $1. The bulls did manage to propel the price above $1, but an extreme bearish pressure knocked the bulls to their knees. However, the price drop now appears to be a bearish trap, to attract new strong hands onto the platform.
MATIC’s price is following a strong trade within the ascending triangle and is about to reach the peak of the consolidation. The recent rebound from the lower support at $0.74, induced significant strength in the rally while the Robinhood announcement fueled the uptrend.
Therefore, the next 24 to 48 hours may be pretty crucial for the asset as the bulls are required to hold their strength and push the price beyond $1.Else the asset may continue with a descending consolidation for a long time ahead.
On the brighter side, Polygon is thriving in the Web3 space as more than 60% of Web3 startups are building on Polygon. Moreover, there are over 20K dApps on the network, which substantials the claim. Collectively, MATIC’s price is expected to coil up once it stabilizes above $1 in the coming days.