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WMA: Bears Regain Control Over Crypto Market Amid SV Bank Collapse
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This Week’s Summary
- The crypto market ends the week at a total market capitalization of $948 billion.
- Bitcoin is down by over 8% after a disappointing week.
- Ethereum decreased by almost 7% over the past seven days.
- XRP lost more than 4% in value this week.
- Almost all altcoins are trading in the red, with virtually no exception.
- The DeFi sector decreased the total value of protocols (TVL) to around $43 billion.
Crypto Trends 06 – 12 March 2023: Market Analysis and Performance
The crypto market struggles to enjoy a consistent revival, albeit it’s not always at fault. This week’s sudden dip followed the spectacular and unexpected collapse of the Silicon Valley Bank, which rippled through all financial markets. The SV Bank was the 16th-largest bank in the US until March 10, when it claimed insolvency. Furthermore, it was the largest bank by deposits in Silicon Valley and held $3.3 billion worth of USDC.
SVB’s bankruptcy came only a week after another financial institution, Silvergate Bank, announced severe operational issues. Both were favorite institutions for crypto heavyweights, using their operations frequently. Unsurprisingly, the crypto market and all its assets took a turn for the worse, dropping significant value. Moreover, the market capitalization dropped below the $1 trillion mark for the first time in over a month.
Bitcoin was the first indicator that the crypto market would lament the SVB collapse. The king crypto traded above $22,000 when the American bank announced the dire news. Almost immediately, it dropped to around $19k and required nearly two days to trade in the green again. Currently, it is grappling by the skin of its teeth to stay above the $20,000 mark.
Ethereum followed BTC’s steps and dropped significantly when the market started falling. The second crypto in command lost the precious $1,500 level following a dip of over 10%. It managed to regain some of the losses in recent hours. At the time of writing, ETH is trading at around $1,470.
Altcoins & DeFi
Almost all the altcoins are bleeding heavily following this week’s events. For example, BNB is down by over 5%, XRP by 4%, and Cardano by 9%. Meanwhile, Polygon decreased by 5%, Dogecoin by 12%, and Solana by 15%. Elsewhere, Polkadot is down by 10%, Shiba Inu by 9%, Litecoin by 24%, TRON by 12%, and Avalanche by 11%.
The Metaverse sector shares the same sentiment as the rest of the crypto market. For instance, Theta Network is down by 11%, Axie Infinity by 19%, and Decentraland by 11%. Meanwhile, ApeCoin decreased by 20%, ICP by almost 13%, and The Sandbox by 16%.
The DeFi sector lost over $5 billion to the total value of locked protocols (TVL), now at nearly $43.43 billion.
Crypto Market Analysis – What’s in the News?
- US President Joe Biden announced new tax changes, including an increase to the capital gains tax, targeting crypto investors as well.
- Gary Gensler, the United States Securities and Exchange Commission (SEC) Chairman, increased pressure on the crypto market, announcing imminent stricter regulations.
- The co-founder and former CEO of BitMEX, Arthur Haye, proposed the creation of a Bitcoin-pegged stablecoin, NakaDollar.
Next Week’s Crypto Market Forecast
The crypto market ended one of the worse weeks of 2023, seemingly under attack from every direction. Firstly, important financial institutions in the crypto industry are crumbling. Next, regulators and politicians are cracking down on cryptocurrency enthusiasts and their gains. Evidently, it’s not the best of times for the crypto space. Hopefully, the trend will reverse soon.