“Peacekeeping” mission prompted economic sanctions, while the experts bet on a lateral market with a bearish bias.
The cryptoactive market is holding positions this Wednesday after the recent losses, accompanying the rest of the global markets that seem to be taking a breather after a Tuesday of high stock market tension. The movement of Russian troops into the separatist regions of eastern Ukraine, in what the Kremlin called a “peacekeeping” mission, has prompted a response from the US and Europe in the form of economic sanctions, while the US president Joe Biden has called the Kremlin’s military action an “invasion” of Ukraine.
Bitcoin managed to cling to $38,000 on Tuesday, a price that is also around this Wednesday, surpassing it and falling below this barrier constantly. However, the previous day left lows for the second consecutive day below the support that most analysts place at 36,500, with 37,000 as a more psychological than technical control zone. The price action invites pessimism as the digital currency has suffered sharp declines after unsuccessfully facing resistance at $45,000 and not a few believe that $30,000 is back in play.
However, “on the support side, we have the most important of all of them at the lows of January at 32,855 dollars,” warns José María Rodríguez, an analyst at Bolsamanía. “32,500 looks more like the ‘point of no return,’” agrees John Kicklighter, chief strategist at DailyFX.
The Russian-Ukrainian Conflict and its Effects
“The crisis between Russia and Ukraine is affecting all risk markets right now, not just Bitcoin,” comments Nicholas Cawley, strategist at DailyFX. “The constant oscillations of good and bad news make it difficult to value and trade the market at the current time,” says the expert, who believes that, until this condition changes, “it is difficult to see any reason to operate with Bitcoin from the long side or the short”.
The expert believes that from a technical perspective, the break below the support at $39,600 has left Bitcoin vulnerable to further losses. This negative outlook has overshadowed the recent good news in the market, “whose fundamentals are improving day by day,” according to Naeem Aslam, an analyst at AvaTrade. Ukraine has legalized Bitcoin, while Russia is undergoing the same process for investments in digital currencies. In addition, there have been reports of Fidelity launching a Bitcoin ETF in Europe and news that BlackRock, the $10 trillion asset manager, is preparing to offer cryptocurrency support for its clients. These reports “normally would give the crypto space a boost to the upside, but this has not been the case,” Cawley says.
Cawley sees the Bitcoin as moving sideways with a marginal downward bias “until the conflict in Eastern Europe is resolved.”
Furthermore, Edward Moya, an analyst at Oanda, explains that, “Bitcoin is an unwitting participant in the volatility that It is affecting all risk assets due to the tensions between Russia and Ukraine.” From his perspective, this happens because investors start to expect a protracted military conflict.
The queen of cryptocurrencies could fall victim to a scramble for cash, Moya said, “but once the wave of panic selling passes, long-term bets would quickly return. Moya adds that, “holders could be put to the test shortly,” using the term to refer to crypto investors who hold their positions regardless of price.
According to Emanuele Giusto Kantfish, author of the book ‘Crypto Jungle. Low Cost Comes to Finance’, Ukraine is positioned as one of the countries in which the adoption of crypto assets is growing faster, along with the United States, India, Vietnam, Nigeria, and Argentina. The measure “allows citizens to protect their personal finances, allows investors to have an alternative, given the country’s critical situation and, on the other hand, creates the foundations for it to position itself on the world map as an attractive destination for investors from cryptocurrencies from all over the world.”
Altcoins Cut Sharp Downs
The behavior of the ‘altcoins’ in the rest of the market emulates Bitcoin, with most of them partially recovering from Tuesday’s bleeding, since sales were primed in tokens such as Cardano, Solana, XRP or terra . Most maintain notable losses in the last seven days, despite turning green in the last 24 hours. Additionally, the total market capitalization has risen to 1.73 billion dollars.
Ethereum withstood bear pressure above the $2,500 support and moves above $2,600, but experts believe it remains exposed to further declines before it stabilizes as it has accumulated 15% losses over the last seven days. Ether, the unit of the Ethereum network, has multiple strong support levels at $2,200 and $1,850, and technical analysts do not believe it will break below $1,800 any time soon. In general, they indicate that any drop below these levels is a buying opportunity.
By Audy Castaneda
