Daily News | Moody's Downgrades Financial Sector, Bitcoin Gains Confidence, and MakerDAO Seeks Stability

2023-03-15, 02:24

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![](https://gimg2.gateimg.com/image/article/16788468390315.jpg)

## Crypto Daily Digest: Moody's Cuts Financial Sector Outlook as <a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> Rebounds with Confidence in Digital Asset Industry

Good morning, traders! Let’s seize this Wednesday relentlessly and make the most of it! 🚀

Investors believe that the worst of the global fallout from the American banking sector has passed, leading to a rebound in Asian equities on Wednesday. Australian shares rose, while stock futures for benchmarks in Hong Kong and Japan gained more than 1%. US stocks also recovered from earlier losses, with the Nasdaq 100 notching its biggest one-day gain since early February. However, relief rallies in banking stocks were limited, and Moody's Investor Service cut its outlook on the financial sector after the collapse of three banks in the past few days.

Treasury yields rose after data showed that inflation remained high in February, and swaps traders expect the Federal Reserve to increase rates by a quarter of a percentage point. US consumer prices rose in line with economists' forecasts. Susannah Streeter, head of money and markets at Hargreaves Lansdown, believes policymakers may still pause on rates. In Asia, oil rose early while gold was little changed. The focus in Asia on Wednesday will be on China and the release of a slew of economic data, with industrial output and retail sales expected to have picked up.

Meanwhile, <a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> surged above $26,000, its highest level since June 2021, due to growing confidence that the digital asset industry can withstand the recent upheavals in the US financial system. Despite a slight decrease in its 9.4% increase on Tuesday, it has still gained roughly 30% since the collapse of Silicon Valley Bank on 10 March, which contributed to the stabilization of the cryptocurrency market after a tumultuous week featuring the collapse of three US banks that were friendly to crypto. The government's decision to bail out depositors of Silicon Valley Bank was well received by investors and helped <a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> surpass its 200-day moving average of $19,740, which is an early sign of a bull market.

## Topic of the Day: Proposal to Set Debt Ceiling to Zero for Any Collateral Type Could Impact MakerDAO's MKR and DAI

MakerDAO delegates are voting on a proposal to introduce a debt ceiling breaker to prevent adverse impacts on the protocol's stablecoin, DAI, during market turbulence.

The proposal would allow the DAO's governance to set the debt ceiling for any collateral type to zero, enabling the protocol to handle situations where the underlying collateral asset experiences significant market turbulence. The proposal also includes a stipulation to exclude it from the protocol's governance security module delay, allowing for faster action. The proposal has already gained support from seven delegates, but it still needs an additional 37,069 votes to pass.

Positive implications:

- The debt ceiling breaker proposal can improve the stability and resilience of the MakerDAO protocol by enabling it to respond quickly to market turbulence, which could help prevent DAI from losing its peg to the US dollar.

- By allowing the governance to set the debt ceiling to zero for any collateral type, the proposal gives MakerDAO more flexibility to manage risk and ensure the stability of its stablecoin.

- The faster response time enabled by the proposal could enhance the trust and confidence of investors and users in the MakerDAO protocol, which could lead to increased adoption and demand for DAI.

<br>Negative implications:

- The debt ceiling breaker proposal may increase the risk of over-collateralization, where the value of the collateral backing DAI may not be sufficient to cover its outstanding supply, leading to potential losses for MKR holders.

- The proposal could also reduce the demand for MKR, the governance token of the MakerDAO protocol, as the faster response time reduces the need for MKR holders to participate in the governance process. This could potentially lead to a decline in the value of MKR.

- The debt ceiling breaker may also be seen as a short-term fix to a larger systemic issue, and there may be concerns that MakerDAO is not addressing the underlying causes of DAI's instability.

Overall, the impact of the proposal on MakerDAO's governance token MKR and its stablecoin DAI will depend on various factors, including the outcome of the vote, the success of the implementation, and the response of the market and the community.

## MakerDAO (MKR) $857.9 (-0.49%) - Neutral Outlook

**Overview:**

- ***Closest hourly support zone: 857.0 - 844.4***
- ***Closest hourly resistance zone: 871.4 - 879.7***
- ***Key Level: 844.42 (Monthly High of Aug. 2020)***

<br>![](https://gimg2.gateimg.com/image/article/1678846962Untitled03151.png)

![](https://gimg2.gateimg.com/image/article/1678846979Untitled03152.png)

During the previous market surge from February 26th to March 5th, MKR experienced two consecutive rejections from the weekly channel before eventually declining along with the rest of the market. From March 12th to 13th, MKR's rally pushed its price to retest the weekly channel again, but it failed to break through to the disappointment of bullish investors. However, on closer examination of the 4-hour timeframe, a falling wedge pattern has emerged since the rejection two days ago, suggesting a continuation of the uptrend is possible.

If MKR's price drops below the monthly level of 844.42 on the 4-hour chart, the pullback may accelerate, and the target would likely be a demand zone between 801.65 to 788.92, which also coincides with the 200EMA at 797.53. Conversely, if MKR bounces back from the monthly level of 844.42 and closes above the 4-hour downward Fibonacci golden zone (871.38 to 879.67), a retest of the weekly channel would be probable.

**Hourly Resistance zones**

1. 871.4 - 879.7
2. 896.1 - 920.2
3. 959.1 - 1022.2

<br> **Hourly Support zones**

1. 857.0 - 844.4
2. 836.2 - 819.0
3. 801.7 - 788.9

<div class="blog-details-info">
<div>Author:** Peter L.**, Gate.io Researcher
<div class="info-tips">\*This article represents only the views of the researcher and does not constitute any investment suggestions.
<div>\*Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all cases, legal action will be taken due to copyright infringement.
</div>