Cryptos and Bitcoin plummet, dragged down by Silvergate and macro data

Cryptocurrencies fall sharply, and they will close the week in the red, unless there is a last minute surprise. Bitcoin (BTC) extends losses and drops more than 4% in the last 24 hours and threatens to lose $22,000. Ethereum (ETH), meanwhile, also falls over 4% and tries to stay around $1,570.

Downward pressure has been piling up on digital assets after the stock market crash of cryptobank Silvergate Bank. The company shed more than 50% on Wall Street Thursday after announcing it would delay the release of its results due to "a number of circumstances that will adversely affect the timing and unaudited results." The news plunged cryptocurrency investors into utter pessimism and mass withdrawals caused connection problems on cryptocurrency exchange Coinbase by mid-morning.

This news is particularly worrying as Silvergate is a major partner of Binance, the world's largest exchange. Also, recent reports published by 'Reuters' and 'Forbes' indicate that Changpeng Zhao, CEO and founder of the company, may have used customer funds from the platform in a similar way to Sam Bankman-Fried, which ultimately caused FTX to fail.

Meanwhile, news in the macroeconomic environment continues to provide no respite. The latest weekly unemployment data in the United States once again stoked inflationary fears. Weekly jobless claims came in lower than expected, and unit labor costs rose by 3.2% in the fourth quarter, much less than the 8.2% recorded in the first quarter of last year, but twice as fast as analysts expected.

"The new data is just another piece of a puzzle as we begin to sense what lies ahead," stated Ipek Ozkardeskaya, senior analyst at Swissquote Bank, while pointing to the "strange" reaction of equity markets. "The S&P500 kicked off the day in the negative, even tipped a toe below the so-closely-watched 200-DMA. But the index rebounded on the back of dovish comments from Raphael Bostic, who said that the Fed should pause the rate hikes sometime this summer," he added.

"Well, if the equity rally is holding on to a few dovish-sounding comments, defying fresh data that goes clearly in the direction of further rate hikes, then the correction could in fact be ugly," Ozkardeskaya warned.

Today, on Friday, equity markets will face another crucial test with the release of the latest ISM services report for February. For Michael Hewson, chief market analyst at CMC Markets UK, this could act as a decent leading indicator for next week's delayed US employment report.

In other market news, there have been significant declines for the major tokens. Cardano (ADA) takes the brunt, falling over 6%, while Dogecoin (DOGE) and Solan (SOL) drop over 4%. Polkadot (DOT) falls 5% and Ripple (XRP), drops more than 3%.