Top Reasons Why the Crypto Market May Plunge This Weekend!

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The crypto markets have been on a roller coaster ride since the beginning of 2023, as the price has varied largely. The first two weeks witnessed a massive jump that raised the price by more than 40%.

Following which, the bulls seemed to have drained heavily, and the bears regained control and kept the markets under their control, including a couple of pullbacks.

With the recent drop, it appeared that the price would resume with a fine recovery, but multiple factors could keep the crypto space consolidated over the weekend.

It is well known that the crypto space reacts to external factors and surges and falls on a regular basis. The global market cap fell more than 5.3% over the weekend as extreme selling pressure mounted across the space.

However, the consolidated trend is believed to prevail for as long as multiple events are at the doorstep of the crypto space.

Here’s why a plunge could be on the cards this weekend:

Mt. Gox’s 142,000 BTC Unlock

Nearly 142,000 BTC are set to be released this year, with the creditors finally expecting to receive their holdings. The repayments are set to begin on March 10th, with the deadline set at September 10, 2023. A large amount of creditors may hold all or part of their original BTC, but the fear of liquidation continues to mount.

Ethereum Withdrawals-Shanghai Upgrade

The Shanghai upgrade allows the validators to withdraw staked ETH from the Beacon chain. The upgrade was initially scheduled in March but now has been delayed to April. Although the upgrade is likely to be a bullish catalyst for the ETH staking sector, it may generally create amplified selling pressure.

Silvergate Collapse

Silvergate, a Californian bank that primarily deals in crypto transactions, operates the Silvergate Exchange Network (SEN), which enabled the crypto exchanges to offer their users the ability to trade fiat currency.

However, it was exposed to FTX-collapse and suffered a $1 billion loss. As exchanges withdraw their support, it may have a reverse impact on the crypto space.

Macroeconomic Shift

There has been a shift in the microeconomic data as CPI and PPE results are coming in below expectations. The probability of an increase of 50 bps in the next FOMC meeting is quite possible, as it is currently at 26.2%. Therefore, the upcoming CPI data on March 13th may also have a deep impact on the crypto space.

Regulatory Crypto Clampdown

The crypto space is in the middle of the biggest crypto crackdown ever. The recent scrutiny on Kraken and Paxos highlighted the SEC’s newfound aggressive approach towards regulation focused on staking products.