Cryptocurrency-focused lender Silvergate Capital reported a $1 billion loss in its Q4 2022 earnings as investors raced to withdraw deposits after crypto exchange FTX`s bankruptcy. The Company is currently re-evaluating its businesses and strategies in light of its current business and regulatory challenges. These troubles highlight the fragility of confidence in digital assets.
In less than 24 hours after Silvergate bank, liquidity concerns combined with an exchange margin cascade a sharp fall in most digital assets. BTC fell more than 6% in Friday`s first trading hours before recovering some losses. Other significant altcoins also experienced this sharp comedown fueled mainly by concerns over Silvergate bank.
Silvergate Capital`s earnings report is the aftermath of FTX`s bankruptcy. Again, it shows the lack of trust in the cryptocurrency market, which means believing in any long-term bullish trend needs more time and more substantial reasons. Looking at some of the headlines after this report confirms that these concerns should be watched more seriously. Coinbase and Crypto.com announced that they had stopped using Silvergate. After them, Stablecoin giant Circle subsequently stated that it was "sensitive to the concerns around Silvergate" and was "in the process of unwinding certain services with them."
From a technical point of view, after breaching the 20-DMA at $23,400, now $19,300 seems like the next target, which, if broken, then we have to look back to $16,000 more seriously.
