Bitcoin has fallen massively as Russia invades Ukraine.
NewsOnline reports that Bitcoin has fallen massively below the $35,000 support zone in the Asian trading session today as Russian President, Vladimir Putin, authorized a special military operation in Ukraine, representing a full invasion of the country.
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With Bitcoin down, as you would expect, the broader cryptocurrency market is down. The cryptocurrency market capitalization is currently down 15.43% for the day, falling below the $1.5 trillion mark, to currently stand at $1.45 trillion.
With Bitcoin down 8%, other altcoins are down even more. Ether for example, is currently trading $2,323 as of the time of this writing, down 13%. Of the top 20 altcoins, we are seeing decline of 14% and above with Cardano’s native token ADA being the largest decliner, losing over 17% as of the time of this writing.
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What you should know
- It would seem that investors do not yet see cryptocurrencies as the asset to run to in times of geo-political tensions and inflation as Gold and other precious metal are bullish in these troubling times.
- Gold is currently trading $1,949 per ounce, currently up over 2%, despite Russia’s invasion of its neighbor, Ukraine. Gold is on its way to trade $2,000 per ounce, if current market conditions are maintained. Asides from Gold, we are also seeing a rally in the price of oil as Brent oil hit $100 per barrel, an eight year high.
- The price action witnessed also comes during a time of high inflationary pressure and a hawkish U.S Federal Reserve, who are trying to hard to reduce the impact of inflation on their economy. The Federal Reserve is expected to begin interest rate hikes in March 2022.
- Even with all indications pointing bearish, we however have some bullish indications of net accumulation seen on on-chain analytics. William Clemente, an on-chain analyst and the lead insights analyst at Blockware explained that he is still bullish on Bitcoin. He stated, “Quite bullish for Bitcoin to see this prolonged regime of spot premium over perps. Summer 2021 regime lasted 88 days, we are currently on day 83 of this current regime.”
- He further stated in another tweet, “Am bullish BTC over next few months. Strong holding behaviour on-chain paired with a lot of relative dry powder sitting on exchanges, stacked bidside in order books, & prolonged regime of spot premium over perps.” He also suggested that the interest rate hike expected from the U.S Fed is likely priced in. He stated, “March will be here next week, max hawkishness likely priced in.”
As the invasion continues, it is likely we see more bearishness in the cryptocurrency space as investors will seek out to invest in more assets that are perceived as safe havens like Gold and other precious metals. Also, there will be more focus on investing in safety net investments like treasury bills and bonds as investors will seek to make sense of the current crisis. Bitcoin currently trades $34,700 as of the time of this writing.
