Bitcoin price sentiment first turned fearful, but soon changed to mildly bullish as price slowly started to climb, regaining lost levels.
February saw a remarkable reversal between inflation and news from the US Federal Reserve, followed by news of a conflict in Eastern Europe that completely overshadowed earlier concerns about economic health. What is happening in Ukraine is causing an immediate drop in prices throughout the market. Bitcoin (BTC) saw a remarkable 11% decline over a 16-hour period, while most altcoins plunged 20% or more.
The initial expectation was that the war would have a negative impact on cryptocurrency prices, which happened for a short time. However, when fear set in, prices rose rapidly.
Nevertheless, the small sample size of days so far has indicated that there is reason to believe the crisis may have a positive effect on BTC and altcoins, as seen in March 2020, with widespread awareness of COVID.
The sentiment turned fearful but calmed down after prices rose. The sentiment is often a good gauge for what you expect to happen next. Over the past month, crowd sentiment as the leading indicator has been extremely effective.
At the end of the Fed and inflation discussions in early February, cryptocurrency prices rose sharply, peaking in the middle of the month when Bitcoin broke above $45,000 before a sharp correction. FUD was the main theme when the war broke out in late February, but sentiment improved as prices quickly rebounded, causing many to speculate that the price drop was nothing more than a “technical bounce”.
Now, traders have turned slightly bullish on Bitcoin again. It is important to mention that cryptocurrencies could be especially volatile as they are currently clinging to the rapid developments of the European crisis.
30-day price Returns on the Entire Map
The case for being a Bitcoin maximalist was very noticeable during the last month of volatility. Yes, there were many projects like Terra (LUNA), XRP, and Shiba Inu (SHIB), among many others, that outperformed BTC in terms of the percentage of market capitalization gained.
However, Bitcoin’s ability not to have relatively volatile slides compared to virtually all other cryptocurrencies, as well as leading the recovery charge for parts of the past month, is why Bitcoin hodlers sat up well.
Rising High Tether Purchasing Power
Stablecoins, like Tether (USDT), particularly with the way large addresses accumulate or sell their holdings, have increasingly become a good benchmark in this regard.
There has been a steady increase in the proportion of the USDT supply, held by addresses holding 10,000 to 1 million USDT, which actually totaled over $1 billion in February. Usually, the amount has a maximum of 1 million because beyond this threshold, there could be many exchange addresses, not taken into account. Regardless, based on what you see, there is clear evidence that sharks and whales have significantly more USDT ready to buy crypto compared to a month ago.
Bitcoin Whales seem to be in a Slight Decline/Hold Pattern
After hitting a one-month low in supply on the day of the war announcement, Bitcoin whales have accumulated only a bit and have held steady with their accumulated holdings. After hitting a low of a month in supply on the day of the war announcement, they amassed only a little and have held steady with their accumulated holdings ever since. Still, stablecoin whales with wallets of 10,000 to 10 million USDT bought more than $1 billion worth of USDT in February, indicating a 7% increase in purchasing power in just one month.
By Audy Castaneda
