- Uniswap price was able to claw back a bit on the back of rumors of a salvage plan for Silvergate.
- UNI tanks lower in European trading as new comments mention that Silvergate Capital will be liquidated.
- This means that cryptocurrencies are officially without a secured and guaranteed payment system.
Uniswap (UNI) price is set to drop another leg lower as a volatile 24 hours has been developing around Silvergate Capital. The US bank that guarantees smooth and secured money flows between fiat and cryptocurrencies is set to wind down its operations and liquidate its assets. The news comes as a negative surprise after initially on Wednesday talks were underway between the board and the Federal Deposit Insurance Corporation (FDIC) with hopes of a salvage plan.
Silvergate Capital implosion means troubles ahead for Uniswap traders
Uniswap price is set to tank at least 5%, while Silvergate Capital is currently imploding over 40% as talks with the FDIC failed to secure the salvage plan. Instead, the US bank is set to liquidate its assets and will close its business. It is the first commercial bank in the US that was under the supervision of the Fed and other controlling bodies that is set to default during this cycle
UNI is thus gearing up for another leg lower as the flow and stream of funds from one crypto broker to another becomes more uncertain. First, support nearby is at $5.90 with the monthly S1 and the green ascending trend line as support. Once bears are able to breach below the green ascending trend line, expect to see a sharp nosedive toward $5.20 when another domino falls in the aftermath of Silvergate’s unwinding.
UNI/USD 4H-chart
In case bulls can contain the situation, a small rebound could be granted toward $6.20. Not much more than that is likely, however, as the 200-day Simple Moving Average (SMA) is in the way of a recovery and will act as a price cap to the upside. In case the Relative Strength Index (RSI) still has plenty of room for a further rally, expect to see a breach through that 200-day SMA toward $6.60 at the 55-day SMA.
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