A new wave of selling pressure hit the cryptocurrency market today, February 23, 2021, as Bitcoin struggles to regain the $ 49,000 level.
Data of Cointelegraph Markets Y TradingView show that Bitcoin fell under intense pressure in the early hours of trading on Tuesday and this caused its price to drop to $ 44,927 before buyers intervened to stop the slide.
Most altcoins and DeFi tokens are currently deeper in their double-digit losses and the price of Bitcoin (BTC) has dropped more than $ 10,000 in the last 48 hours.
At press time, BTC is trading at a price of $ 48,600, reflecting an 11% decline on the day, but according to the Cointelegraph analyst Marcel Pechman, professional traders have looked to buy the dip and opened new leveraged long positions.
Today’s crash has overshadowed several positive developments for the cryptocurrency ecosystem, such as the 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. Both parties also agreed to submit to periodic reporting of their reservations.
Interest in North America’s first Bitcoin ETF has also continued to rise, as Purpose’s Bitcoin exchange-traded fund reached $ 564 million in assets under management (AUM) just five days after its launch. The files also show that 2,251 BTC was added to the fund on February 23.
Setbacks are a sign of a healthy market
Despite the slaughter in the broader market, many crypto traders and professional investors view the current pullback as a necessary breakout that allows overbought assets to retest key underlying support levels.
As the Twitter user pointed out “Bitcoin Archive“, these types of corrections are common and were common during the bull market of 2017, which had” 9 falls of between 20 and 40% “. Despite these deep recurring corrections, the market continued to grow “20 times from its previous all-time high” throughout 2017.
Summarizing how this relates today and where BTC is headed, the Bitcoin Archive said:
“We are now sitting at 2.35 times higher than the all-time high of $ 20,000 from the previous cycle. This rally has only just begun.”
Traditional markets recovered
Traditional markets also experienced early selling pressure Tuesday morning but were able to return to green numbers shortly after Federal Reserve Chairman Jerome Powell will reaffirm that the Fed will maintain current accommodative policies, including keeping interest rates close to zero and asset purchases at the current rate of USD 120 billion per month.
At closing time, the S&P 500 and the Dow rose 0.13% and 0.50% respectively, while the NASDAQ closed 0.50% lower.
Altcoins got the worst of it, with those with the best recent performers hit the hardest
Bitcoin’s $ 13,000 drop in the last 48 hours has taken its toll on the altcoin market and many of the recent DeFi tokens that were hitting new highs took the brunt.
Crypto.com Coin (CRO) experienced a 33% retracement and Venus (XVS), the DeFi protocol of the Binance Smart Chain, saw its price drop 24% to trade at $ 58.63.
A few projects were able to break the trend and post positive gains on February 23, when new announcements about projects related to blockchain interoperability provided a much-needed boost to Layer 2-focused tokens and cross-chain transactions.
Solana (SOL) rose 11.23% to reach USD 14.94 following the launch of their new automated market making protocol, Raydium. The Fantom (FTM) price was also up 24% after the team announced a collaboration with Yearn.finance and the launch of a cross-chain bridge to the Ethereum (ETH) network.
The total cryptocurrency market capitalization is currently $ 1.44 trillion and Bitcoin’s dominance index is 62%.