Market Wrap: Bitcoin Settles Around $47K After Biggest 2-Day Rout in 11 Months

Bitcoin's price has declined 20% since Sunday.

Feb 23, 2021 at 9:42 p.m. UTC
Updated Sep 14, 2021 at 12:15 p.m. UTC

Bitcoin’s punishing sell-off appeared to decelerate as prices settled around $47,000, after the largest cryptocurrency by market capitalization logged its steepest two-day loss since March 2020 early Tuesday.

  • Bitcoin (BTC) trading around $47,851.27 as of 21:00 UTC (4 p.m. ET). Slipping 11.72% over the previous 24 hours.
  • Bitcoin’s 24-hour range: $44,964.49-$55,053.91 (CoinDesk 20)
  • BTC trades below its 10-hour and 50-hour averages on the hourly chart, a bearish signal for market technicians.

Bitcoin trading on Coinbase since Feb. 17.

Bitcoin’s price tumbled along with U.S. stocks after markets opened in the U.S. Tuesday, bringing the cryptocurrency’s decline since Sunday to 20%, the most for a two-day period since the coronavirus-fueled crash in March 2020. The decline has wiped out more than $100 billion of bitcoin’s market value, which last week climbed past $1 trillion for the first time. 

And while many traders are still bullish on bitcoin in the long term, analysts said the largest cryptocurrency may have further to fall in the coming days, traders and analysts said.

As is often the case in digital asset markets, this week’s decline didn’t appear tied to any specific negative news or fundamental data, but to technical factors such as worrisome signals from price charts and a general sense that the market had run too far, too fast: Bitcoin's price had doubled this year to an all-time high price of more than $58,000 as of Sunday.

This week’s price retreat trimmed the 2021 gains by as much as 59%, versus 3.6% for the Standard & Poor’s 500 Index of U.S. stocks. 

“The current market is extremely overheated,” Flex Yang, founder and chief executive officer of Hong Kong-based crypto lender Babel Finance, told CoinDesk. Prices could fall as low as $40,000, he said. 

Bitcoin volumes on eight major exchanges tracked by CoinDesk 20.

The price move came on strong volume, though, indicating high activity on the part of sellers and buyers alike. Trading volume on eight major exchanges tracked by CoinDesk topped $10 billion for the second straight day. 

Signals from the market for bitcoin derivatives showed traders turning slightly less bullish, with futures contract premiums over spot prices shrinking on major exchanges including Deribit, Binance, OKEx and Huobi.

The premiums are still high compared with January levels, indicating the bulls still dominate the market.

Arcane Research, a Norwegian cryptocurrency analysis firm, noted in its weekly newsletter Tuesday that the funding rates – fees that traders pay for leverage – have come down dramatically since Monday, a sign that some of this week’s market rout may have shaken out some of the euphoria.

Funding rates on perpetual futures contracts are set by the market and vary over time as traders put on and take off positions. When the market is bullish, funding rates turn positive and traders taking long positions pay short sellers. When the market is bearish, funding turns negative, and short sellers pay.

Arcane Research also warned that with perpetuals trading again at a “significant” premium to spot prices on Tuesday, the funding rates are poised to rise soon.

“Trying to catch a falling knife is a dangerous exercise, which could ignite a new cascade of liquidations in the near term,” Arcane Research wrote.

There appeared to be little change this week in the outlook for loose monetary policy, which has driven many institutional investors to buy bitcoin as a hedge against eventual inflation. Federal Reserve Chair Jerome Powell, in testimony Tuesday before the U.S. Senate Banking Committee, stuck to his prior message that easy monetary policy wouldn’t budge anytime soon, given the need to keep borrowing rates low as long as it takes for the economy to heal. 

“We view the current pullback as nothing more than a necessary correction to allow for a very strong market to take time to consolidate and reset before eventually looking to continue on its upward trajectory,” Joel Kruger, cryptocurrency strategist at institutional crypto exchange LMAX Digital, said.

And it appears that some have been buying the latest dip, as CoinDesk reported earlier today.

Ether lower; high fees force more liquidations on DeFi lending platforms

Ether (ETH), the second-largest cryptocurrency by market capitalization, was down Tuesday, trading around $1,524.42 and sliding 14.08% in 24 hours as of 21:00 UTC (4:00 p.m. ET).

Similar to bitcoin, ether’s trading volume on major exchanges exploded again on Tuesday.

As ether’s price continued to correct, another record-high $115 million in lending positions in decentralized finance (DeFi) based on the Ethereum blockchain were wiped out Tuesday, as reported by CoinDesk

Other markets

Digital assets on the CoinDesk 20 are mostly in red Tuesday. There were no notable winners as of 21:00 UTC (4:00 p.m. ET).

Notable losers:



  • Oil was up 0.45%. Price per barrel of West Texas Intermediate crude: $61.98.
  • Gold was in the red 0.21% and at $1805.15 as of press time.


  • The 10-year U.S. Treasury bond yield fell Tuesday, dipping to 1.359%.

The CoinDesk 20: The Assets That Matter Most to the Market


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