Bitcoin bolted past $24,000 for the first time in two weeks after surging more than 8% over the past 24 hours, likely the result of the type of short squeeze that historically has sent prices higher. The percentage increase was the largest since BTC jumped 10.5% on Sept. 9.
The largest cryptocurrency by market capitalization had dropped below $21,600 at different points in recent days amid growing investor fretfulness about crypto regulation, particularly targeting the stablecoin market, and about future U.S. central bank steps to tame inflation.
But those concerns seemed to fade quickly as bitcoin surged past $24,100 by the afternoon before retreating slightly.
Data from crypto data provider Coinglass showed that traders who bet on price shifts liquidated some $65 million of bitcoin over the past 24 hours, from which about $60 million were in short positions.
Crypto-related stocks also jumped, with both exchange Coinbase (COIN) and bitcoin miner Marathon Digital Holdings (MARA) increasing 15%. Business software company MicroStrategy (MSTR), a major BTC holder, recently rose more than 9%.
Lucas Outumuro, head of research at blockchain analytics firm IntoTheBlock, said that investors also found reason for optimism in Tuesday's tepid U.S. Consumer Price Index (CPI), which showed inflation declining slightly to 6.4% on an annual basis even as it failed to meet analysts expectations. "Since the market reaction to the CPI print was positive even if it was higher than expected, I believe this was seen as a sign of strength for the rally to continue in risk assets altogether," Outumuro told CoinDesk.
Riyad Carey, research analyst at crypto data firm Kaiko, also said that markets also may have already accounted for concerns about increased regulation tied to stablecoins, including Binance's BUSD token.
"Crypto has had some added catalysts with the BUSD news, which has largely been absorbed and I think today was a reflection of some of the regulatory fears – and immediate fears around BUSD – easing," Carey told CoinDesk.
UPDATE (Feb. 15, 2023, 20:41 UTC): Updates headline and adds historical context to the size of bitcoin's 24-hour increase.
UPDATE (Feb. 15, 2023, 20:56 UTC): Updates to reflect latest liquidation of BTC short and other positions.
UPDATE (Feb. 15, 2023, 21:05 UTC): Updates price chart.
UPDATE (Feb. 15, 2023, 22:39 UTC): Adds analysts comments.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.