Speculations Behind Bitcoin’s 7.94% Decrease

Bitcoin decreased by 7.94%, the speculation behind the Bitcoin decrease could be the collapse of Silvergate bank

The aftermath of the collapse of Silvergate Bank, caused the cryptocurrency market to decline today. The market capitalization of all cryptocurrencies is $931.99B, down 6.59% from yesterday. The price of Bitcoin decreased by 7.94% in one day and by 10.55%. Despite a difficult macroeconomic environment and a declining correlation between cryptocurrencies and stocks, Bitcoin and Ethereum have held up reasonably well. Other setbacks for the space include the recent Silvergate developments and the post-FTX regulatory crackdown on the industry that started in February. Let's explore the speculations behind Bitcoin's decrease in this article.

After falling more than 60% to less than $17,000 in 2022 due to the decline in risky assets and the collapse of FTX, a Silvergate client, bitcoin has recovered this year. Even with the most recent dip, bitcoin is still up more than 30% for the year; however, given the general decline in the surge in risk assets, it may experience a month of flat trading. Experts claimed that the problems at Silvergate weren't the direct cause of the decrease in Bitcoin and Ethereum. Moreover, liquidations, macro factors, and technical indicators were mentioned. Bitcoin fell below $23,000 overnight reaching its lowest point in the past two weeks.

2023 had gotten off to a fantastic start for bitcoin and the cryptocurrency industry, with 64% of investors making money as the price of bitcoin touched $25,300 on February 21. With revenues increasing by 50% to $23 million, even struggling Bitcoin miners experienced huge growth, indicating a turnaround for the troubled sector.

Investors' appetite for risk is likely to remain low in the interim, so prospective cryptocurrency traders may want to hold off until there are indications that US inflation has peaked or until the Fed indicates that smaller-scale interest rate increases are on the horizon. A more open regulatory roadmap for the cryptocurrency business would also assist to boost confidence in the area.

Does Bitcoin recover its losses? Every investor asks themselves this. Bitcoin, the most valuable cryptocurrency in the world, was trading at around $25,000 at the time. Last week, Bitcoin (BTC) fell below $22,000, shattering the expectations of cryptocurrency fans. Its price fell nearly 5% from its high. Investors have gone into defensive mode due to uncertainty around rate increases in the US and other significant macroeconomic variables.

Meanwhile, India's severe stance towards cryptocurrencies continues as the government has now included any transactions related to cryptocurrency in the scope of the money laundering legislation. The Union Finance Ministry of India said in a separate gazette announcement that the Prevention of Money Laundering Act will apply to any transactions using virtual currencies or digital assets (PMLA).

The industry has praised this action nonetheless since it is a step towards regulating this area, where, in the absence of regulators, the enforcement authorities will immediately address any inconsistencies.

Around $19 billion is being traded daily in bitcoin as of this writing. Bitcoin had been trading comfortably near $25,000 for the first time in the previous six months just a week prior. In reality, Bitcoin has grown significantly during the last two weeks, now recently waned approximately 10 percent this week.