Friday, 3 March 2023

Market Summary

Market Summary 3 March 2023

Bitcoin Price: US$ 23,465.31 (-0.69%)
Ethereum Price:
US$ 1,647.86 (-1.04%)  


Bitcoin and Ether experienced a slight dip in trading following the release of US job data, which showed a tight job market that is likely to put upward pressure on prices. The US Federal Reserve’s Federal Open Market Committee has expressed concerns about the stubbornly robust employment market on multiple occasions, noting that jobless claims must increase to relieve inflationary pressures. However, jobless claims have not risen since February 5, and the four-week average of initial jobless claims has moved higher. Marathon Digital, one of the largest publicly traded bitcoin miners, sold 650 bitcoins out of 683 it mined in February to help pay for operating expenses and for general corporate purposes, but increased its unrestricted bitcoin holdings from 8,090 bitcoins as of January 31, 2023, to 8,260.

Block, a financial-technology company led by Jack Dorsey, has launched “c=” (pronounced “c equals”), a new business entity focused on improving liquidity and routing on the Lightning Network, Bitcoin’s layer 2 scaling system. Lightning transactions are at an all-time high, but the network is experiencing growing pains, with many transactions failing due to poor liquidity and inefficient payment routing. C= will commit bitcoin to the Lightning Network and build infrastructure to bolster network reliability.

Ethereum is currently in the spotlight as it prepares for its Shanghai upgrade in April. This upgrade is expected to allow some $29 billion of staked ether to be withdrawn for the first time since staking commenced on Ethereum’s proof-of-stake Beacon Chain in December 2020. Despite fears that the upgrade could lead to a major crash in the price of ether due to large-scale withdrawals and dumping of coins by long-time stakers, analysts believe that the volume of ETH outflows will be less significant than anticipated, and inflows from new stakers will balance it out.

Meanwhile, Ethereum developers have coined the term “Shapella” to refer to the upcoming upgrade, which is also known as Capella on the consensus layer. This has caused some confusion for traders and industry executives who have mostly referred to it as the Shanghai upgrade. Nonetheless, the upgrade is expected to be a significant development for Ethereum, and traders will be closely watching its impact on the cryptocurrency market.

In other news, Bitcoin leverage positions continue to rise as traders seek to hedge their positions and reduce their counterparty exposure. The margin long-to-shorts ratio for BTC recently hit a record high of $2.5 billion, with a highly unusual imbalance that favors longs betting on a price increase. Despite this, movement in margin markets has been restricted so far, as the BTC futures markets have remained relatively calm in 2023. As traders continue to seek leverage positions, it remains to be seen how this will impact the cryptocurrency market in the coming months.

Xapo Bank, a private bank based in Gibraltar, has integrated the Lightning Network via a partnership with infrastructure platform Lightspark, which will enable faster and cheaper transactions on its platform. Users will be able to instantly pay for small purchases of up to $100 at any vendor accepting Lightning payments. Meanwhile, around $5.9m of crypto donations have been made to support relief efforts in Turkey and Syria following earthquakes last month, with blockchain analytics firm Chainalysis estimating that cryptocurrency’s speed and global reach is proving to be an important means of providing quick monetary support during times of crisis.

Polygon has launched a zero-knowledge decentralized identity solution, Polygon ID, which uses cryptographic techniques to allow users to verify their identity online without having their sensitive information passed or potentially stored with a third party. The service uses zero-knowledge proofs (ZK proofs) and aims to solve the issue of digital trust. In other news, Celo president Rene Reinsberg discussed on a podcast how Celo intends to stay relevant in the multichain world of layer-1 blockchains and layer-2 networks by focusing on improving its mobile experience and catering to users who access DeFi on devices or interfaces with limited screen size, and developing economies where its impact can be seen and felt.




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