Bitcoin rallies above $51,000 as a significant amount of short positions get liquidated

Over $130 million in cryptocurrency short positions were liquidated in the past 24 hours on centralized cryptocurrency exchanges, according to Coinglass data .

The  bitcoin market experienced increased volatility over the past day, with the price spiking above the $51,000 mark. This price action caused the wipeout of over $93 million in bitcoin positions — with almost $70 million being shorts.

Bitcoin's value has appreciated by over 21% since the beginning of February, with the foremost cryptocurrency's dominance now standing at 50%, compared to 16.3% for ether .

On Wednesday, the entire cryptocurrency market capitalization rebounded back above $2 trillion — a high not seen since April 2022. Bitcoin increased by almost 3% in the past 24 hours, trading for $51,521 at 5:40 a.m. ET, according to The Block's Prices Page .

Crypto market defies risk-off macro conditions

The cryptocurrency market is buoyant compared to a decline in U.S. equities over the past 24 hours. On Tuesday, the Dow Jones Industrial Average fell 412 points or 1.1%, and the SP 500 was down 1.1% after the release of a inflation report for January in the United States. The report from the U.S. Labor Department showed that the consumer price index rose 0.3% from December to January — up from a 0.2% increase the previous month.

Inflation has not cooled as much as markets were positioned for, reinforcing the overall expectation that the Federal Reserve will not cut rates in March. Markets have now priced in a 91.5% chance of a rate pause next month — a notable shift from the consensus one month ago that there would be a rate cut in March.

According to the CME FedWatch tool , interest rate traders see a 34% possibility of a rate cut at May's Federal Open Market Committee meeting but also a significant 63.3% chance of another rate pause.