Bitcoin price crashes to $20,300 amid Biden budget, Silvergate bank collapse and macroeconomic concerns

• Bitcoin price plunged by more than 6% in the span of 24 hours to trade at $20,357.
• The new crypto tax policy in Biden’s 2024 budget plan might eliminate wash trading and place a 30% tax on mining electricity usage.
• Earlier on Wednesday, Silvergate Bank’s announcement of winding down and liquidating the bank added to investors’ panic.

Bitcoin price, after sustaining nearly two weeks of bearishness, broke down on Thursday night as the biggest cryptocurrency in the world fell to a two-month low. The increasing fear regarding the future momentum of crypto has further ameliorated the panic selling resulting in a drawdown in price.

Bitcoin price goes down

Bitcoin price could be seen trading at $20,357 at the time of writing. The cryptocurrency fell from $21,712 on Thursday to mark a 6.25% drop. This added to the ongoing fall in price, bringing the five-day crash to 9.19%. In the same span, BTC lost its support of $22,000 as well as the critical support of $21,410.

The crypto asset is now looking to find some support from traders and investors to pull it out of its current conditions. The Relative Strength Index (RSI) is nearly in the oversold zone below the 30.0 mark. This zone is usually an indicator of a change in trend, which could push Bitcoin prices back up.

BTC would need to reclaim $21,410 as a support floor, which will enable the cryptocurrency to rise toward the critical resistance at $23,090. This would mark a 13% rise and also allow BTC to touch the year-to-date highs of $24,943.

BTC/USD 1-day chart

But if the decline does not come to an end over the next few trading sessions, BTC might be looking at a considerable crash. The rising panic selling would result in a fall in price, potentially pulling BTC down to the critical support of $18,289. If this level is lost, the bullish thesis would be invalidated, and the cryptocurrency would be looking at a two-month low.

Why is the market crashing

While the persisting volatility always causes swings in price, the last few days, in particular, have been rather disappointing for the crypto market. The recent speech from Federal Reserve Chair Jerome Powell talked about the potential of raising interest rate hikes going forward.

The add to that, United States President Joe Biden also talked about crypto in its 2024 budget plan. Biden suggested deploying a new 30% crypto tax on electricity used in crypto mining as well as eliminating wash trading from the crypto market. This tax would start off at 10% for the first year and increase to 30% eventually.

To make matters further worse for the crypto market, Silvergate Bank on Wednesday announced that the bank intends to wind down its operations and liquidate it. Known to be among the biggest crypto transaction handling banks, it was bound to bear some impact every now and then.

Thus, Bitcoin price could not handle the sudden onset of this bearish pressure resulting in the cryptocurrency to fall to $20,357.

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