Crypto-versed: prices drop on latest exchange failure
The Silvergate failure pushes crypto lower and sentiment cools on Fed rate hike expectations.
Crypto assets dipped last week as fresh systemic and macro risks reared their head. In this week's Crypto Verse, we go through the factors driving Crypto prices and check in on the technicals of Bitcoin, Ether, and the Crypto 10 Index .
Systemic problems, macro risks
The price of Crypto assets dropped last week amid fresh systemic risks to the industry. Another exchange is at risk of collapse, with Silvergate Capital closing its exchange after Moody’s downgraded its bank deposit rating. The news sparked a spill in crypto prices, as traders positioned for potential forced liquidations.
Monetary policy also remains a headwind for cryptos. Expectations for higher US rates ratcheted up again, especially after the testimony of US Fed Chairperson Jerome Powell before US Congress.
Powell sought to quash inferences that the central bank sees disinflation emerging this year, and suggested the Fed sees an even higher peak for the Federal Funds Rate than it did at its last meeting. In his testimony, Powell also highlighted the need to regulate the crypto industry.
Three cryptos to watch
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Bitcoin
Momentum remains skewed to the downside for Bitcoin. The daily RSI is below 50, with trendline support broken last week. The crypto is carving out a descending wedge, in a possibly bullish signal. Near-term support remains around $US21,400, and resistance is roughly $22,600.
Bitcoin daily chart
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Ether
Momentum is also skewed to the downside for Ether, with the crypto breaking trendline support. Buyers continue to defend $1500/50, while resistance remains at $1660/70. A break of support could open a fall to $1460.
Ether daily chart
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Crypto 10 Index
The Crypto 10 Index has broken its uptrend and is now trading within a short-term trend channel. Price is currently finding support at roughly $7000, a break of which could open a sell-off towards a confluence of support levels around $6700. On the upside, near-term resistance is at $7264.
Crypto 10 Index daily chart
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