March 2, 2023 – Bitcoin prices continue to meet resistance near the US$24k level, but finding support around US$23k. It is possible that Bitcoin remains around this price range until the Fed’s next interest rate decision on March 22. Similarly, Ether prices seem to be stuck between US$1,600-1,700, partially due to the same reasons Bitcoin is also unable to break out. However, there is more uncertainty regarding the second largest cryptocurrency by market cap. The long-awaited Ethereum network Shanghai Upgrade will take place sometime this month, which will enable users to withdraw their staked ETHs from Ethereum’s proof-of-stake (PoS) smart contract. Some analysts believe that this could trigger a short-term sell-off, taking ETH price to the US$1,250 support level, while the bulls see it potentially reaching US$2,000. If history is any indication, the price action at the event could be similar to that of the Merge, when the blockchain migrated from proof-of-work to proof-of-stake, and prices fell after a bull run, in our view.
Meanwhile, the Ethereum sidechain Polygon released an identification service called Polygon ID that will allow the authentication of users credentials without compromising personal information. It uses zero-knowledge proofs to authenticate data, keep it encrypted and hidden from the verifying party. This is part of Polygon zkEVM to be launched later this month, which is a zero-knowledge proof that performs off-chain computations on a secondary layer for faster and cheaper transactions. Polygon claims its zkEVM will be equivalent to Ethereum’s Virtual Machine, but this allegation backfired in social media, dropping their native token MATIC price near 20% since last week. We see Polygon as one of the most promising protocols in the near future especially due to its zero-knowledge proof technology.
Last but not least, some risks related to the FTX collapse in late 2022 seem to have reemerged, despite we thought they could have been mitigated already. The crypto-friendly bank Silvergate’s shares dropped over 30% after the company announced it will delay its annual earnings report. The bank told the SEC that it may be less than well-capitalized and said it was reevaluating its business. On top of that Coinbase announced it is halting payments to and from the bank. The Silvergate’s demise could have already been priced in by the market, thus, potentially causing less damage if it comes to fruition. However, it could be another test to the crypto market resilience in March, in our view.
Top news:
- First Mover Americas: Bitcoin Falls to Below $23.5K
- Ethereum eyes 25% correction in March, but ETH price bulls have a silver lining
- Polygon Rolls Out Zero-Knowledge, Privacy-Enhanced Identification Product
- Silvergate Stock Plunges 31% as Crypto Bank Delays SEC Financial Report
- Coinbase Halts Payments With Silvergate Bank
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