Crypto News Today: After a relatively bullish first two months of the year 2023, the cryptocurrency market is currently exposed to FUD around the Silvergate crisis. Interestingly, the FUD around Silvergate Bank crisis is deeper than it appears, in that the prices failed to recover despite stock market rally on Monday. Meanwhile, traders are gearing up for Jerome Powell hearing before the US Senate committee. More importantly, it has already been revealed that the crypto ecosystem will come up for discussion during the hearing.
The hearing on The Semiannual Monetary Policy Report to the Congress will feature Federal Reserve Chairman Jerome Powell testifying about the state of the US economy and the central bank’s monetary policy outlook for the rest of the year. As with previous statements from Powell, the hearing is likely to arouse huge interest among traders with high chances of volatility.
S&P 500 Vs Bitcoin Price Divergence
The crypto market recovery post-FTX collapse has been marked by the return of close correlation of Bitcoin price with the S&P 500 Index. However, the impact of Silvergate crisis is so high on the crypto market that the sentiment has now turned to neutral from an otherwise bullish environment. On chain data suggested that prior to the outburst of the Silvergate related FUD, majority of traders were long on crypto tokens. Despite this and the stock market rally from last week, there have been hardly any signs of recovery in crypto prices.
Interestingly, the S&P 500 Vs Bitcoin Price divergence is currently at its highest since the FTX collapse in November 2022.
📊 #Crypto traders continue (somewhat) patiently waiting for prices to pick up as #equities have continued to mildly rise Monday. The correlation break between the two sectors is currently at its most prominent since the #FTX collapse four months ago. https://t.co/XkyzDlIDWT pic.twitter.com/ptpYAgp57p
— Santiment (@santimentfeed) March 6, 2023
Hence, any encouraging signals from Powell during the hearing about signs of disinflation or economic recovery could likely spur a jump both in stock markets as well as the crypto prices. Traders will also factor in any significant developments from the Grayscale Vs SEC lawsuit arguments.