The crypto community is in turmoil as one of the leading payment services, Silvergate Capital, backs out of the crypto business. Silvergate, a second-tier retail bank that pioneered a commercial gateway for money transactions between cryptocurrencies and hard cash, has cut off its services, leading to potential funding issues for the crypto participants. This pullback comes after the FTX meltdown and Terra’s LUNA collapse, further adding to the bearish sentiment in the market.
Cardano (ADA) price already dropped nearly 6% on Friday in the European session when initial reports came out about Silvergate’s backing out. ADA had recently broken out of the bearish triangle but faced sharp rejections, leading to another existential crisis for altcoins. As the bearish triangle completes, the pressure on ADA is expected to lead to a drop toward $0.32, with a 10% leg lower at $0.30.
Potential solutions for the funding gap
While the pullback from Silvergate has created a funding gap for the crypto community, there may be potential solutions in the form of new service providers. Several big banks have already created a trading desk for cryptocurrencies, and it would be a small step for them to take on the business and provide the services Silvergate did in the past. This would create a calmer environment in the altcoin space, potentially leading to ADA breaking out of the red descending trendline with a revaluation near $0.37.
In conclusion, the pullback from Silvergate has put Cardano (ADA) price under pressure, potentially leading to a drop in the market. However, the potential for new service providers to fill the funding gap provides hope for a calmer environment in the altcoin space. While the future of ADA remains uncertain, investors should keep an eye on developments in the market and potential solutions for the funding gap.