Bitcoin Drops to Near $39K; Celo, Anchor Protocol Defy Market Selloff, Here Is the Likely Cause and What Analysts Say

Bitcoin (BTC) hit lows of $39,083 on Mar. 4 after the largest cryptocurrency by market capitalization had been steadily declining since Mar. 2, presumably due to fears that the Federal Reserve might tighten monetary conditions quickly in the face of rapidly growing inflation.

Altcoins likewise fell as the cryptocurrency market tumbled under selling pressure. The majority of Altcoins recorded losses between 3% and 11%. Solana (SOL), Avalanche (AVAX), and Ethereum (ETH) are down by more than 6%. Meme coins, such as Shiba Inu and Dogecoin, are also down nearly 5%.

On the contrary, Waves (WAVES, +3.91%), THORChain (RUNE, +5.98%), Anchor Protocol (ANC, +19.97%), Celo (CELO, +6.82%), Golem (GLM, +14.43%) rather defied the market selloff and traded in green at press time.

The Crypto Fear and Greed Index that gauges market sentiment measured ”fear” at press time. According to recent data from Coinglass, 69,314 traders were hit with liquidations as the entire crypto market dipped.

Over $271 million was liquidated in the last 24 hours, with roughly $102 million occurring in the last four hours; nearly $118 million of it was tied to Bitcoin trading positions. On the Bybit exchange, the largest single liquidation order was placed. Bitcoin trades at $39,236 at press time.

Here Is the Likely Cause and What Analysts Say

According to Crypto analyst, Ali Martinez, the latest dip wiped off overleveraging in the market ”On Binance Futures, 58.65% of all accounts are net-long on Bitcoin, which could result in a BTC dip to liquidate some overleveraged traders”.

Contributing also to the sour sentiment are comments from Fed Chair Jerome Powell on Tuesday promising a 25 basis point rate hike later this month. Supporting the narrative for tightening monetary policy is the recently released nonfarm payrolls report.

The data indicated a huge number of 678,000 jobs added in February against expectations for just 400,000. The traditional markets saw additional pressures following a Bloomberg report that the Biden administration was considering banning oil imports from Russia.

IntoTheBlock’s IOMAP paints a clear picture for Bitcoin, ”The most significant support for BTC sits at $40,500 while the most significant resistance sits at $45,000. Breaking support could push BTC to $37,000 while breaking resistance will send it to $49,000”.

As per Whale map data, ”the closest strongest on-chain support for Bitcoin remains at $38,583 and $36,841”.