We have developed a device based on a microwire network formed from bio-functionalised silver nanowires (AgNWs) through dielectrophoresis (DEP) and hydrogel entrapment. This was achieved by carrying out the DEP assembly of AgNWs in an agarose aqueous solution above its gelling temperature and then cooling to encapsulate the assembled structure within the hydrogel which turns it into an electrically anisotropic material that contains up to 99% water. We have studied in detail the formation of microwires assembled from silver nanowires (AgNWs) in agarose gel, at fixed temperature and AC field voltage, which allowed us to build a "phase diagram" of the microwire assembly as a function of the agarose and AgNW concentration at three different lengths of the AgNWs. In this proof-of-concept study, the AgNWs were functionalised with thiolated biotin, then assembled into microwires by DEP and entrapped into a hydrogel. When exposed to a solution of streptavidin the biosensor device showed a marked increase of the cell conductivity due to compacting of the AgNWs which allows streptavidin detection. This generic type of biosensing device could find applications for detection of other biomolecules, the response to which can be directly converted to an electric signal. Conjugating specific antibodies on the AgNW surface would allow the detection of a matching antigen (e.g. protein) in the solution exposed to the anisotropic hydrogel.