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BTC and Sub-$18,500 in the Hands of USD Coin and Silicon Valley Bank

By:
Bob Mason
Published: Mar 12, 2023, 05:39 GMT+00:00

BTC found support at sub-$20,000 on Saturday, with USDC providing modest support. Today, we expect the NASDAQ mini to influence in the final hour.

BTC technical analysis - FX Empire

In this article:

Key Insights:

  • It was a bullish Saturday session, with BTC extending its losing streak to five sessions.
  • Dip buyers delivered modest support on Sunday as investors tracked updates on USD Coin and Silicon Valley Bank
  • Technical indicators remain bearish, with sub-$18,500 in view.

On Saturday, bitcoin (BTC) rose by 1.62%. Reversing a 0.88% loss from Friday, BTC ended the day at $20,529. While BTC revisited sub-$20,000 for the second time since January 14, BTC ended a five-day losing streak.

A bullish start to the day saw BTC rise to an early high of $20,789. BTC broke through the First Major Resistance Level (R1) at $20,525 before sliding to a mid-morning low of $19,863. However, steering clear of the First Major Support Level (S1) at $19,735, BTC bounced back to end the day at $20,529.

USD Coin and Silicon Valley Bank Delivered a Choppy Saturday Session

Fed Fear took a back seat on Saturday, with investors monitoring updates on Silicon Valley Bank and the USD Coin (USDC) de-peg.

On Saturday, news hit the wires of Circle planning to address the Silicon Valley Bank shortfall with corporate resources. Circle issued an update on USDC and Silicon Valley Bank, saying,

“It is possible that SVB may not return 100% and that any return might take some time, as the FDIC issues IOUs (i.e., receivership certificates) and advanced dividends to deposit holders.”

The SVB statement went on to say,

“In such a case, Circle, as required by law under stored-value money transmission regulation, will stand behind USDC and cover any shortfall using corporate resources, involving external capital if necessary.”

While the statement delivered support, USDC remained de-pegged from the dollar at $0.9705 this morning.

However, updates on the demise of Silicon Valley Bank (SIVB) were less crypto-friendly. Investors will have to wait until Monday for further details. The Federal Reserve announced an emergency meeting on Monday, which may shed light on whether regulators can make SVB creditors whole. Ahead of the Fed meeting, SVB contagion will remain heightened.

Considering the situation and the threat to other US regional banks, updates will have a material influence on the US futures and the crypto market by default.

The NASDAQ Composite Index fell by 1.76% on Friday, with the Dow and S&P 500 seeing losses of 1.07% and 1.45%, respectively.

NASDAQ correlation.
NASDAQ – BTCUSD 120323 Daily Chart

The Day Ahead

Silicon Valley Bank and USD Coin updates will likely remain focal points today. In the final hour, the NASDAQ mini will guide investors as investors grapple with the threat of further bank closures.

However, the markets should continue to monitor Binance and FTX news and updates from the ongoing SEC v Ripple case.

Bitcoin (BTC) Price Action

This morning, BTC was down 0.48% to $20,431. A mixed start to the day saw BTC rise to an early high of $20,562 before falling to a low of $20,379.

BTC sees early red.
BTCUSD 120323 Daily Chart

BTC Technical Indicators

BTC needs to avoid the $20,394 pivot to target the First Major Resistance Level (R1) at $20,824. A move through the Saturday high of $20,789 would signal an extended bullish session. The crypto news wires should be crypto-friendly to support an extended rally.

In the event of an extended rally, BTC would likely test the Second Major Resistance Level (R2) at $21,320 and resistance at $21,500. The Third Major Resistance Level (R3) sits at $22,246.

A fall through the pivot would bring the First Major Support Level (S1) at $19,998 into play. However, barring a crypto event-fueled crypto sell-off, BTC should avoid sub-$19,000. The Second Major Support Level (S2) at $19,468 should limit the downside.

The Third Major Support Level (S3) sits at $18,542.

BTC resistance levels in play above the pivot.
BTCUSD 120323 Hourly Chart

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bearish signal. BTC sat below the 50-day EMA ($21,402). The 50-day EMA slid back from the 200-day EMA, with the 100-day EMA falling back from the 200-day EMA, delivering bearish signals.

A move through R1 ($20,924) would give the bulls a run at R2 ($21,319) and the 50-day EMA ($21,402). A move through the 50-day EMA would send a bullish signal. However, failure to move through the 50-day EMA ($21,402) would leave the bears in control.

EMAs are bearish.
BTCUSD 120323 4 Hourly Chart

About the Author

Bob Masonauthor

With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.

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