Experts explained that the prices of Bitcoin, Ethereum, and other cryptocurrencies may continue to fall due to the crisis in Ukraine.
This February 24, various cryptocurrencies such as Bitcoin, Ethereum, XRP, among others, suffered a sharp drop after the war in Ukraine. For example, Bitcoin fell 8.5% reaching $34,337 after Vladimir Putin announced the attack on Ukraine. Ethereum, the second-largest crypto, posted a drop of 12% and its price is around $2,301. Other coins like XRP, Cardano, and Solana also fell, according to Bloomberg.
Bitcoin Price Falls as Tensions Rise
The price of Bitcoin has seen a sharp drop after Russian President Vladimir Putin officially announced a “special military operation” to complete the “demilitarization” of Ukraine.
Media have reported explosions in the capital of Kiev after Putin declared war on Ukraine. There have also been reports of a series of explosions heard in the city of Kharkiv, some 300 miles east of the Ukrainian capital.
The total cryptocurrency market capitalization has fallen by almost 5% in the last 24 hours. US stock markets have tumbled, with the Dow Jones Industrial Average down 1.38% at the time of writing.
Bitcoin price fell below the $35,000 level, breaking below the lower bound of the symmetrical triangle pattern at $36,673 and putting a further 32% collapse to $25,039 on the table.
Bitcoin price may drop towards the nearest level of support at the Jan 22 low of $34,056, before falling towards the June 27 low of $31,973.
Additional lines of defense may emerge at the June 26 low of $30,151 before reaching the 127.2% Fibonacci extension at $27,652.
However, if buying pressure mounts, Bitcoin bulls may attempt to reach the lower bound of the prevailing chart pattern at $36,930, which coincides with the 78.6% Fibonacci retracement.
Larger draws will target the 50-day simple moving average at $40,138.
What the Experts Say
After the start of the war between Russia and Ukraine, and the fall of the main cryptocurrencies, it is evident that these are assets with great variations and that their integration with global financial markets is increasing; turning them into high-risk assets, according to the head of research and strategy at the cryptocurrency exchange, Ben Caselin.
Additionally, the chief of operations of the Cooper.co crypto platform, Jonathan Tse, explained that the crisis between Russia and Ukraine could cause cryptocurrency prices to drop significantly in the short term.
“However, it could be what is needed to find a bottom sooner, rather than an ongoing crypto winter for prices to slowly decline,” Tse noted.
The vice president of corporate development at Luno, a crypto platform, Vijay Ayyar; If new falls occur, the price of Bitcoin could fall between $28,000 to $29,000.
Economist Jason Furman, a former adviser to President Barack Obama, said this week that, “Russia is incredibly unimportant in the world economy, except for oil and gas. It’s basically one large gas station.”
Holders see Bitcoin (BTC) as a hedge against inflation, with many expecting its price to show resilience in a time of crisis. However, Sam Bankman-Fried, CEO of global cryptocurrency and derivatives spot exchange FTX, believes that the drop in BTC was not a surprise. On Twitter, he published that, “It makes sense that stocks are down. War is, generally, bad. What should BTC be doing here? Well, on the one hand, if the world gets shittier, people have less free cash. Basically, selling BTC–along with stocks, etc.–to pay for war.”
Bankman-Fried said the war has created a cash shortage in the market that has led to selloffs in both traditional and cryptocurrency markets. BTC’s price drop is also attributed to its increasing correlation with the Nasdaq and the S&P 500, which recently hit a two-year high.
Bankman-Fried also pointed to the destabilization of the currency in Eastern Europe, suggesting that Eastern European investors could look for alternatives due to the invasion of Ukraine, which could make BTC an obvious choice.
By Audy Castaneda
