Bitcoin Holds Strong Over $23.6K to Continue Recent Consolidation

DeFi giant Maker’s MKR token surged nearly 19%. Equities turned mixed amid ongoing investor worries about inflation.

AccessTimeIconMar 2, 2023 at 12:52 a.m. UTC
Updated Mar 2, 2023 at 2:57 p.m. UTC

Bitcoin edged toward $24,000 early Wednesday, dropped but then rebounded to hold strong above $23,600.

The largest cryptocurrency by market capitalization was trading at press time at about $23,663, up 2.3% over the past 24 hours.

Bitcoin (BTC)’s failure to regain the $25,000 threshold it surpassed in mid-February and recent consolidation “could be a sign of weakness, at least in the short term,” Craig Erlam, senior market analyst at foreign exchange market maker Oanda, wrote in a Wednesday note.

Ether (ETH), the second-largest cryptocurrency, recently jumped by more than 4% to recently trade around $1,665. The CoinDesk Market Index that measures crypto market performance was up around 2.9% for the day.

Decentralized finance (DeFi) lending and borrowing platform Maker’s native MKR token saw a nearly 19% surge over the past 24 hours. Data from Coinglass showed that traders who bet on price shifts liquidated more than $444,000 of MKR short positions in the past 24 hours. That was more than 16 times the $27,000 of MKR long positions that investors liquidated over the same period. These types of short squeezes have historically tended to accelerate price jumps.

In a tweet last week, blockchain analytics firm Santiment noted the largest whale moves involving MKR in three months with more than 24,000 of the tokens worth around $17.4 million at the time “moved to a whale address” and a subsequent identically sized move. Santiment viewed the moves as bullish.

“On downswings, massive moves like this are often correlated with turnarounds," Santiment wrote.

Meanwhile, traditional markets were mixed on Wednesday as the S&P 500 and the tech-heavy Nasdaq Composite slid 0.4% and 0.6%, respectively. The Dow Jones Industrial Average (DJIA) was up 0.02%.

In the aftermath of several disappointing indicators suggesting that inflation remains problematic, investors increasingly expect the U.S. Federal Reserve to continue raising interest rates in upcoming months, although a fourth consecutive monthly contraction in the Institute of Supply Management (ISM) Manufacturing PMI data offered some evidence of an economic slowdown.

Macroeconomic concerns pushed the 10-year Treasury yield to over 4% Wednesday – the first time since November.

“We want prices to rise at a much slower rate than they are now, so disinflation will need to occur for that to happen,” Steve Sosnick, chief strategist at brokerage firm Interactive Brokers, wrote in a Wednesday note, referencing Fed Chair Jerome Powell's repeated use the term of “disinflation” in February.

“We should all welcome the time when disinflation becomes a lasting feature of our economy,” Sosnick continued. “But for now, the disinflation that we might have seen late last year appears to have been transitory.”


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Jocelyn Yang

Jocelyn Yang is a markets reporter at CoinDesk. She is a recent graduate of Emerson College's journalism program.