Three reasons why the price of Bitcoin is falling

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Last Updated on 6 November 2023 by CryptoTips.eu

The crypto market saw a (minor) selloff on Friday and is not doing much better on Saturday morning. If you’re wondering why and if this is a good time to buy, here’s a rundown of the top three reasons. In essence, they’re inflation, momentum and Silvergate

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Inflation

As experts at CNBC reported earlier this week (and we did as well), the level of inflation is a major determinant of what the direction of stocks and crypto will be in March. If there are signs that inflation continues to fall, you can expect Bitcoin and tech stocks to rise. At the moment, inflation seems to be falling, but not very quickly, so the rally in both crypto and stocks has come to a halt.

Momentum

Secondly, investor momentum appears to be bearish (negative) rather than bullish (positive) at the moment and fear is returning to the market. As Bitcoin refuses to make the jump to $30k, we now have to see where there is support for the largest digital currency. Some are already claiming another plunge below $20k is a possibility.

Silvergate

Thirdly, there is Silvergate, the California bank that is very much determining media coverage of crypto right now.

If you remember, in mid-January everything seemed to be going very well for Bitcoin, which even made a 30% profit in that month. Yet there were already the first signs that the FTX debacle would be bigger than expected. Sam Bankman-Fried’s giant crypto platform had invested in several other companies and borrowed money from a well-known California bank called Silvergate. On January 7, Cryptotips already reported that that bank could collapse.

Silvergate’s shares already tumbled on the American stock exchange at that time. In the six weeks that followed, it remained fairly quiet and the bank communicated only that it was trying to cooperate with the US government to ensure its survival.

However, earlier this week, Silvergate reported that it was required to delay the publication of its full-year results.

Shares of Silvergate fell nearly 50% to $7 in early trading on the New York Stock Exchange in response. They had closed at $13.53 the previous day. At the peak of the crypto boom in late 2021, the stock price had reached an all-time high of $219.75. After the stock market closed on Friday, Silvergate shares traded for $5.

Jeroen Kok

Jeroen is one of the lead copywriters on Cryptotips.eu and discusses all recent events in the crypto market. This includes news updates, but also price analyzes and more. He developed his passion for cryptocurrency during the bull run in 2017. He has learned a lot since then. The combination of cryptocurrency and creative writing is perfect for Jeroen and an excellent way to share his knowledge with a wide audience. Find me on LinkedIn / [email protected]
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