I hope you are all well and having a great day, welcome to CryptoGod-1's blog on all things crypto. With the recent news of Silvergate and the crash in crypto prices ones again, it is an interesting time to consider the overall sentiment of the market. Is the mini bull run over and was it in fact just a bull-trap, or is this drop only a minor blip in the longer term of an inevitable rise in prices over the weeks and moths ahead?
The Prophecy....Maybe?
Back on the 27th of February, famed crypto enthusiasts and strategist Benjamin Cowen (check him out if you don't know of him) claimed that it looked like history was about to repeat itself, On Twitter he posed an image showing the the NDQ Dotcom boom from back in the early 2000's along with an image of Ethereum over the previous couple of years. In a starkly similar manner, he noted how the levels reach in the Dotcom boom are very similar to the levels we saw in Ethereum. The high of $4816 during the Dotcom boom was almost the same as the $4867 all time high price of ETH, and the impending levels of the crash has also reached similar highs and lows.
Given where he believes we are in the journey, Benjamin is hinting at possible ETH levels of in and around the $800 mark IF the cryptocurrency is following the same pattern as the Dotcom bubble burst. Definitely a worrying sign for anybody who had been pinning their hopes on a rise in crypto prices in the near future. It is also very important to note how the Dotcom levels continued to trade at less than 50% of their ATH prices for years after the bubble had crashed, so if we are in a crypto bubble does that mean less than $2k ETH is the maximum for the upcoming years?
He is also not the only one predicting big lows ahead. Twitter user @profit8lue has noted the 'double top reversal pattern' which formed and is predicting for Bitcoin to crash back down towards the $16-$18k levels we were at in the beginning of 2023.
It has long since been an ongoing rumour, similar to the End of 2021 $10k ETH, that Bitcoin will go towards $10k before it goes anywhere back towards its previous all time high prices of November 2021.
Markets Tumble
So why are these bearish theories coming back into the fore so much? Well unless you have had your head buried in the sand, the previous week has been a tough one for crypto once again. The price of Bitcoin has fallen below the $20,000 level for the first time since mid-January and this has been in the mid of a bunch of bearish news.
Among the news was the stronger-than-expected inflation report, which called into question how the U.S. Federal Reserve's early 2023 assertion that a disinflation trend had begun. It has since been acknowledged that Chair Jerome Powell has told Congress the Fed needs to do a lot more in terms of bringing inflation down to the 2% target it had set.
Along with the interest rate fears, the well known crypto-friendly lender Silvergate Bank collapsed on Wednesday evening, causing a major drop in crypto prices. With a lot of uncertainty created from the Silvergate collapse, it is expected to continue having a negative impact on the market for some time yet.
As if things could not get worse, fears were raised on Wednesday, the same day Silvergate collapsed, that the U.S. Department of Justice may be attempting to sell the 49,000 or so Bitcoin it has seized from the Silk Road dark net marketplace. These Bitcoin were moved to new addresses and the movement sparked theories that if they become available for sale then it will add a flooding to the market.
Due to all the bearish sentiment, the CEO of crypto fund manager BitBull Capital, Joe DiPasquale, made a statement to the popular crypto site CoinDesk. Within an email he stated that:
"Silvergate is one of several factors in bitcoin’s underside test. In addition to Silvergate, there is market concern of greater interest rate hikes by the [Federal Open Market Committee] and softening stock market prices. The [Securities and Exchange Commission] also shows increasing scrutiny of crypto. Taken together, the market has continued to tighten and retest support levels."
Due to these levels of uncertainty, DiPasquale has also expressed his opinion that the next real levels of resilience to Bitcoin will see it testing its support just under $20K before moving up again. They then see the next level of in and around $18K as being the next major level of support.
All in all it has been a difficult week for those who had pinned their hopes on a continued rally upwards from Bitcoin and the wider crypto market. Whether this is a short-term correction or the impact of all the bearish news send Bitcoin spiralling lower and lower remains to be seen. For now it is hovering at around the $20,170 mark (at time of writing) and many will hope it can maintain this level of support. If Benjamin Cowen and others in the space who are predicting lower prices are correct, it could mean that we are far from finished with crypto winter just yet.
Have a great day.
CryptoGod-1.
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