Bitcoin (BTC<\/a>) refused to let $20,000 support die for good on March 11 as the weekend opened to a battle for lost ground.<\/p>\n Data from Cointelegraph Markets Pro<\/a> and TradingView<\/a>\u00a0showed BTC\/USD circling $20,200 at the time of writing.<\/p>\n A brief dip below the $20,000 mark overnight was short-lived, and the mood appeared more stable as the initial\u00a0panic over United States bank stability<\/a> subsided.<\/p>\n The collapse of Silicon Valley Bank (SVB), which followed Silvergate in dealing a fresh blow to some crypto firms, nonetheless continued to play out.<\/p>\n At the heart of the debacle was payments technology company Circle, which overnight revealed it had<\/a>\u00a0part of the reserve funds for its stablecoin, USD Coin (USDC<\/a>), with SVB.<\/p>\n USDC immediately began to slide<\/a> from its U.S. dollar peg and was redeemable at the time of writing for only $0.91. At one point, Bitcoin was worth more than $26,000 in USDC terms on the major exchange Kraken.<\/p>\n \u201cIf USDC is only 90% backed, the equilibrium price is NOT $0.90. The equilibrium price is ZERO,\u201d Cory Klippsten, CEO of Swan Bitcoin, reacted<\/a>, adding:<\/p>\n \u201cEveryone has the incentive to redeem asap for $1. You don\u2019t want to be in the last 10%, with all the money already gone.\u201c<\/p><\/blockquote>\n Others believed the situation was manageable and that USDC, the second-largest stablecoin by market cap, would not fail altogether.<\/p>\n 2\/ The worst has already happened <\/p>\n We now know that 8.2% ($3.3B out of $40B) is currently stuck in SVB, but it doesn’t mean that the money is gone.<\/p>\n As Adam pointed out, in a similar FDIC recovery process, we can expect a 94% payout.<\/p>\n So the damage could be around $198M USD. https:\/\/t.co\/xvshlKuCmZ<\/a><\/p>\n \u2014 Ignas | DeFi Research (@DefiIgnas) March 11, 2023<\/a><\/p><\/blockquote>\n In a tweet<\/a>, Circle said it had a further five banking partners for managing its USDC cash reserves.<\/p>\n Beyond USDC, nerves among traders predictably remained.<\/p>\n Related:\u00a0Circle\u2019s USDC instability causes domino effect on DAI, USDD stablecoins<\/a><\/em><\/strong><\/p>\n Average funding rates<\/a> were at their most negative since the FTX aftermath in November 2022, indicating a strong belief that further losses could still impact Bitcoin.<\/p>\n Analyzing the implications, however, commentator Tedtalksmacro argued that overwhelming bearish bias could provide fuel for a classic \u201cshort squeeze\u201d higher on BTC\/USD.<\/p>\n \u201cThe market remains heavily short here, still. And that could provide fuel for BTC to test at least 21.4k short-term,\u201d part of a tweet read<\/a>.<\/p>\n Tedtalksmacro added that a squeeze was already \u201cwell underway\u201d based on Bitcoin\u2019s bounce off multiweek lows beneath the $20,000 mark.<\/p>\n Other popular market participants favored a return to the downside in the short term.<\/p>\n \u201cAmongst the madness today, Bitcoin remains good. I am anticipating another drop down to the interim support zone around $19,200,\u201c Crypto Tony told<\/a> followers.<\/p>\n The views, thoughts and opinions expressed here are the authors\u2019 alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.\n<\/p>\n<\/div>\n![](\"https:\/\/s3.cointelegraph.com\/uploads\/2023-03\/f9b4886e-02a1-4140-a8b7-1e06f2ad7edf.png\")
Bitcoin shakes off USDC depeg<\/h2>\n
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Funding rates mimic FTX mood<\/h2>\n
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