Cryptocurrency prices are declining, and there may be issues with market liquidity, particularly for tech companies and risky assets.

Bitcoin and other cryptocurrencies are being sold off due to liquidity concerns related to the situation at Silvergate Bank, which could impact the entire tech sector.

Bitcoin quickly fell below the $19,900 mark, dropping more than 10% over the last 24 hours. While the capital shortfall at Silvergate is likely putting pressure on the markets, there are other forces at play as well.

A broader liquidity deficit is possible, as Silicon Valley Bank (SVB) is also under pressure, and there are doubts about its ability to meet clients' liquidity needs, but information on this issue is limited.

SVB works with startups in Silicon Valley, and if it experiences a liquidity crisis, it could impact a range of small tech companies and the crypto market. SVB's shares have sharply declined, similar to the situation with Silvergate. If the decline continues, the bank may face solvency issues.

While US capital markets are typically deep, smaller banks do not have access to liquidity to the same extent as central banks. If a new liquidity crisis arises, asset prices, including cryptocurrencies, may decline over the coming weekends.