Another wave of selling pressure hit the cryptocurrency market on February 23, when Bitcoin struggled to regain $ 49,000 levels.
Data from Cointelegraph Markets and TradingView shows Bitcoin came under heavy pressure in early Tuesday’s trading hours, pushing the price of BTC to $ 44,927 before buyers arrived to halt the decline.
The majority of Altcoins and DeFi tokens are now even deeper in their double-digit losses and Bitcoin (BTC) price has fallen more than $ 10,000 in the past 48 hours.
BTC / USDT 4-hour chart. Source: TradingView
At the time of writing, BTC is trading at a price of $ 48,600, down 11% for the day. However, according to Cointelegraph analyst Marcel Pechman, pro traders have tried to buy the dip and open new leveraged long positions.
Today’s market downturn has overshadowed several positive developments for the cryptocurrency ecosystem, including news that Bitfinex and Tether have settled their case with the New York Attorney General’s office and agreed to pay $ 18.5 million in damages to New York State to pay. Both parties also agreed to report their reserves regularly.
Interest in North America’s first exchange-traded Bitcoin fund has also continued to explode as the Purpose Bitcoin ETF grew to $ 564 million in assets under management just five days after the fund was launched. The records also show that 2,251 BTC was added to the fund on February 23.
Pullbacks are a sign of a healthy market
Despite the market-wide carnage, many crypto traders and professional investors view the current pullback as a necessary break that will allow overbought assets to retest key underlying support levels.
As the Twitter user “Bitcoin Archive” pointed out, corrections like these are natural and common during the bull market in 2017 with “9 drops between 20 and 40%”. Despite these recurring, profound corrections, the market still rose 20 times its previous all-time high over the course of 2017.
Significant BTC price drops during the 2017 bull run. Source: Twitter
Bitcoin Archive summarized how this relates today and where BTC is heading:
“We are now sitting on 2.35 times the previous ATH OF 20k cycle. This rally is just beginning. “
Traditional markets are recovering
Traditional markets also faced early selling pressure Tuesday morning, but rebounded shortly after Federal Reserve Chairman Jerome Powell reaffirmed that the Fed will maintain current accommodation policies, including keeping rates close Zero and asset purchases at current rate of $ 120 billion per month.
In the end, the S&P 500 and the Dow Jones Industrial Average rose 0.13% and 0.50%, respectively, while the Nasdaq closed 0.50%.
Altcoins are beaten, with the youngest high-flyers being hit the hardest
Bitcoin’s $ 13,000 decline in the past 48 hours has put a heavy strain on the altcoin market, and many of the recent soaring DeFi (Decentral Finance) tokens have taken the brunt of the damage.
Daily market performance in cryptocurrencies. Source: Coin360
Crypto.com Coin (CRO) was down 33% and Binance Smart Chain’s Venus (XVS) DeFi protocol was down 24% in price, trading at $ 58.63.
A select few projects bucked the trend and posted positive profits on Feb.23 as new announcements on blockchain interoperability projects gave tokens, which focus on layer-two and cross-chain transactions, a much-needed boost.
Solana (SOL) was up 11.23%, trading at $ 14.94 following the release of its new Raydium automated market maker protocol. Fantom (FTM) price also rose 24% after the team announced a collaboration with Yearn.finance and the introduction of a cross-chain bridge to the Ethereum network.
BTC / USD daily chart. Source: Coin360
The total market cap for cryptocurrencies is now $ 1.44 trillion, and Bitcoin’s dominance rate is 62%.