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In another shocking twist that has dealt a severe blow to the price of bitcoin, crypto-friendly bank Silvergate announced that it would be winding down operations as the contagion from the FTX collapse spreads. Naturally, this led to a swift decline in the price of BTC, dragging it to the mid-$21,000s once more. This recent event, coupled with other developments in the market, could mean that bitcoin and others are moving back into the bear market. U.S. President Biden Comes For Crypto Gains According to a Wall Street Journal report, U.S. President Biden has once again turned his attention toward the cryptocurrency market in a way that would affect how investors trade assets in the space. A fiscal 2024 budget plan that is expected to be revealed on March 9 included a proposal to increase the capital gains from 20% to almost 40%. Related Reading: Cardano Investors Suffer As Vast Majority Of ADA Holders Nurse Losses One of the reasons given for this is to stop the phenomenon known as “tax loss harvesting” in crypto. What this means is that sometimes, investors would sell their cryptocurrencies at a loss to make it a claimable loss on their tax filings, but then repurchase the assets right after. This will however be limited to higher net-worth individuals making at least $1 million a year. Despite this cutoff, the broader market has not received the proposal well. Participants in the space have expressed their displeasure at the proposal. One of these is crypto analyst Lark Davis who took to Twitter and posted the tweet below. Biden proposing to double capital gains taxes from 20 to 40% and not allowing for tax loss harvesting on #bitcoin …. WTF… pic.twitter.com/SnJNglpoAA — Lark Davis (@TheCryptoLark) March 9, 2023 Bitcoin Returns To Bear Market Levels As the news of Silvergate’s collapse and the new tax proposal by President Biden spread, digital assets in the crypto space quickly responded. Bitcoin lost its footing above $22,000 and fell to $21,500 for the first time in over three weeks. BTC declines to three-week low | Source: BTCUSD on TradingView.com Other digital assets in the space followed this trend with the likes of Ethereum, Cardano, and Dogecoin all cascading down with over 2% losses. This has pushed the crypto market farther back into the bear territory, increasing the possibility of a prolonged bear market. The tumble in price also saw market liquidations cross $100 million in the last 24 hours. Related Reading: Crypto Fear & Greed Index Drops To One-Month Low, Here’s What It Means However, bitcoin has held up better than expected so far. The digital asset found support above $21,500, suggesting that there was still a reasonable amount of buy pressure in the marketing holding the pioneer cryptocurrency up. As such, liquidations have slowed down significantly in the last 4 hours to only $6.7 million. Whether bitcoin will continue to fall remains to be seen at this point. If BTC is able to reclaim the $22,000 level before the trading day is over, then this would have only been a temporary setback and the cryptocurrency could resume its upward trajectory. Follow Best Owie on Twitter for market insights, updates, and the occasional funny tweet… Featured image from NameCoinNews, chart from TradingView.com