Ethereum killers and layer-2 tokens rally despite 5% Bitcoin price drop

Altcoins offering layer-2 solutions pushed higher while profit-taking resulted in Bitcoin price pulling back to the $45,000 level.

On Feb. 10, Bitcoin (BTC) price pulled back 5% from its newly established $48,220 high and a number of altcoins also underwent slight corrections. 

Data from Cointelegraph Markets and TradingView shows Bitcoin has declined 4.96% since yesterday’s highs and currently trades at $44,900.

The pullback to the $45,000 level could simply be the result of traders taking recent profits from Bitcoin and altcoins as the rally appeared to be losing momentum around the $48,000 level.

A recent announcement from JPMorgan analysts saying that they don’t expect to see any large firms follow Tesla’s recent $1.5 billion Bitcoin purchase could have caused jitters among some investors but data from Grayscale Investments shows most institutional investors are keen to learn more about investing in BTC.

BTC/USDT 4-hour chart. Source: TradingView

A bit of positive news came from Twitter CEO Jack Dorsey, who doubled down on his support for the crypto sector by donating $1 million to Coin Center, a Washington D.C.-based advocacy group. Dorsey also revealed that Twitter is exploring the option of how it could pay employees in BTC.

Congestion and high transaction fees on the Ethereum network have put a spotlight on layer-2 and Ethereum Virtual Machine (EVM) compatible protocols as projects and traders alike flood to Matic (MATIC) and Avalanche (AVAX).

This steady inflow of funds to each project resulted in price rallies of more than than 200% over the past week.

AVAX/USDT vs. BNB/USDT vs Matic/USDT price growth 4-hour chart. Source: TradingView

Binance Coin (BNB) has also seen significant price appreciation in recent days, reaching a new high at $148 on Feb.10. The move to a new all-time high comes as the Binance Smart Chain (BSC) grows in prominence and competes with Ethereum and DeFi platforms.

Traditional markets dip after setting new all-time highs

The three major stock market indices established new record-highs in today’s early trading hours before falling under pressure to close the day mixed.

The S&P 500 and NASDAQ spent most of the day in the red and despite a late surge closed down 0.03% and 0.25% respectively while the Dow was able to hold bears off and finish up 0.20%.

While there was no specific news prompting market pressure, all three indices have seen surging prices during the first week of February, so a modest pullback is expected in a normal market cycle.

Bitcoin’s correction weighs on altcoins

A new wave of selling hit the crypto market just as traditional markets closed and the top-25 altcoins fell under pressure.

Notable exceptions to the bearish downturn include Cardano (ADA), which is currently up 28.11% and trading at a price of $0.892, and AVAX which is up 85.39%and trading for $58.26.

Daily cryptocurrency market performance. Source: Coin360

Celo (CELO) is also put on a strong showing, up 40% to trade at $5.00 while The Graph (GRT) has seen its price spike 26% to a new all-time high of $1.26.

The overall cryptocurrency market cap now stands at $1.37 trillion and Bitcoin’s dominance rate is 61.3%.

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