Bitcoin price held steady above the crucial zone of $22,000 on Monday after plunging to a two-week low on Friday. In the ensuing sessions, the focus will be on whether the market has fully priced in the worst for the crypto sector.
What’s driving the market?
According to CoinMarketCap, the global market cap dropped by 0.53% over the past 24 hours. Even so, it has remained above the crucial level of $1 trillion; an aspect that has offered some reassurance to crypto traders. Indeed, this reassurance is largely what has held BTC/USD above the aforementioned level.
Even so, the traders appear hesitant to place huge bets as the crypto market continues to digest the Silvergate Capital Corp. fallout. The US bank, which is crypto-friendly and a major payments network for the industry, stated that it is reviewing its viability.
Silvergate enables real-time transfer of funds from one crypto firm to another. However, most trading desks, digital asset exchanges, and stablecoin issuers have stopped to make or accept payments via Silvergate.
Notably, the firm is one of the crypto industry’s key US banking platforms. This explains why the publicized liquidity concerns have had a significant influence on the market. The bankrupt FTX was Silvergate’s client. As such, its woes are evidence of FTX contagion risks.
As the week progresses, the focus will largely be on the mood in the market. Signs that the market has priced in the worst of the crypto winter will likely sustain bitcoin price above $22,000 and yield a rebound towards $23,000.
Bitcoin price forecast
On Friday, bitcoin price extended its previous losses; erasing the gains recorded between 14th and 21st February. Granted, the bulls successfully defended the support at the crucial level of 22,000.
Since then, it has made rather subtle movements; hovering around the 50-day EMA. Even so, it continues to trade below the short term 25-day EMA.
In the new week, I am cautiously optimistic about bitcoin price movements. On the one hand, I expect 22,000 to remain a steady support level for the cryptocurrency. With this in mind, the range between the aforementioned zone and the resistance level of 22,795.54 will be worth watching. Even with further rebounding, its gains will likely be curbed at 23,059.76.