Top Coins Avoid SVB Spillover ⚠️

Last week was no good. Not for the stock market. Not for the debt market. And surely not for the crypto market. The events were nothing short of a roller coaster ride—especially so for crypto. The closure of Silvergate, the implications of Silicon Valley Bank (SVB)... There was a lot going on! The developments sent shockwaves across asset classes, and here we are, staring at what looks like a “Lehman Brothers” moment. So let’s hold our cool and try to make sense of what’s happening.

Silvergate is one of the industry’s few banking partners in the US. So with its collapse, access to US banking routes will get more difficult for crypto players. This raises questions about the stability of the crypto market in the short term. As a result, we saw a sharp fall in crypto prices.

Sharp remarks from Fed Chair Jerome Powell also did not help. Powell said that since inflation is still uncomfortably high, interest rates may be raised further and stay high for longer. The comment led to widespread selling. Subsequently, the crypto market cap fell below the $1 trillion threshold, and Bitcoin breached a critical support line at $20,000.

Meanwhile, the collapse of Silicon Valley Bank initially had a limited impact on the crypto market. But as soon as Circle put out a Twitter post stating that $3.3 billion of its $40 billion USDC reserves are stuck with SVB, a massive sell-off followed. As a result, USDC dropped below its $1 peg. The stablecoin lost close to 10% of its value on visiting the sub-90 cents zone on Saturday.

However, thanks to the Fed and the government stepping in by providing the ultimate backstop for depositors in the troubled bank, Circle has now been able to reinstate USDC’s peg. BTC plus broader markets have gained ~10% in the last 24hrs and BTC has regained the $22,000 mark. The crypto market cap is back above $1 trillion, allaying some investor worries and providing support for top cryptos.

Moving ahead, we are likely to continue to witness a high level of volatility in crypto prices. As the market navigates the many uncertainties, the trading liquidity is likely to remain uneven.

As we watch the market with bated breath, here’s a quick recap of all that’s been unfolding in the news. Of course, this is excluding the two biggest news pieces, which we have already discussed—the fate of Silvergate and SVB.

US proposes 30% tax on crypto mining

The US Treasury Department is pushing for an excise tax on the electricity bills of crypto mining companies. It is proposing that the tax apply after 31 December 2023. Phased in over three years at an annual rate of 10%, the third year will bring in the maximum tax rate of 30%. (Source: Cointelegraph)

Shibarium beta version set for launch

The much-awaited Shibarium Layer-2 blockchain is set to see the light of day this week with Shiba Inu releasing its beta version. Announcing the launch, Shiba Inu put out a tweet urging users to keep a tab on all Shib’s socials for the next few days. (Source: Coindesk)

MakerDAO proposes additional $750M US Treasury purchase

MakerDAO, the DAO behind the stablecoin DAI, is reviewing a proposal to allocate an additional $750 million in short-term US Treasury purchases. By doing this, it is hoping to take advantage of the favorable yield environment. (Source: Coindesk)

ETH

Almost all top cryptos bounced higher after testing their key support levels over the weekend. As SVB’s spillover concerns flooded the market, Ether (ETH), too, broke out of the very narrow range it was trading in near the crucial support level at ₹1,36,000.

ETH touched a low of ₹1,21,700 before reversing its downward trend. It has now broken above multiple resistance levels and is showcasing V-type recovery. ETH is currently above the crucial 50- and 200-EMA slopes. If ETH manages to cross the ₹1,39,000 level in a day or two, its next target will be the ₹1,44,000 mark.

The Relative Strength Index (RSI) has also moved higher above 50 (a neutral level), indicating a buildup of bullish momentum. However, as the market navigates through many uncertainties, ETH is likely to be more volatile. As always, DYOR.

If you are new to charts, read our beginner’s guide to TradingView charts.

SNX

SNX is one of the few top crypto coins maintaining a bullish stance in the market at present. Gaining over 30% in the last 24 hours, SNX is one of the top gainers among the top cryptos now. The bullish trend is due to some important ecosystem developments.

• Synthetix V3 was deployed on the mainnet in February, an important milestone that will facilitate a transition to a distributed pool model. With this, liquidity providers can contribute to liquidity in different pools across multiple markets, leading to higher TVLs.

• The network launched the Schedar Release in February to burn fees and reduce debt for stakers.

• Also, Synthetix has added 22 new crypto coins to its perpetual futures market.

Let’s hope for more optimistic stories like the SNX one next week.

Meanwhile, thanks for sticking around!

See you later, folks.

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