Bitcoin (BTC), which opened on Wall Street on February 24, saw a slight increase in trading, despite Russia’s invasion of Ukraine and its aftermath remaining at the top of markets’ minds.
BTC/USD 1-hour candle charts (Bitstamp). Source: TradingView
Cryptocurrency’s “dominant driver,” risk sentiment, set to become
Cointelegraph Markets Pro and TradingView data showed that BTC/USD was close to $36,400 on Bitstamp just two hours after the opening bell. This is up to $2,000 above its previous lows.
The music of Russia’s overnight invasion into Ukraine reverberated across global trading, and skittish markets were the first to be hit.
Russia’s stock markets suffered a different level, with MOEX losing half its value and trading being stopped at one point.
Bitcoin suffered earlier in the day but made a decent comeback.
“At the beginning of the week, the escalating tensions with Russia and Ukraine had struck crypto markets hard. Cointelegraph was told by Sahil Sakhrani (a market analyst at Macro Hive), that crypto indices had already suffered large losses in all sectors.
Sakhrani warned against further sanctions against Russia’s economy and suggested that Bitcoin’s relationship to traditional equities should not be ignored.
He continued, “Now, the news has worsened, with an apparent Russian invasion in Ukraine followed by the EU and the U.K, and the U.S. proposing additional sanctions against Russia.”
Markets will likely be dominated by risk aversion. As the correlation between Bitcoin & NASDAQ is increasing, broader risk sentiment will likely become the dominant driver of crypto market.
The conflict also caused a second point of contention: the United States Federal Reserve could reduce key rate increases.
Perhaps the #Fed is relieved by the #Russian invasion of the Ukraine as it now has an excuse to not raise interest rates for Mar. It wouldn’t have been this, but it’s hard to find other excuses. The news reported that #Gold jumped 1.5% while #Bitcoin dropped 5.5%.
— Peter Schiff (@PeterSchiff), February 24, 2022
Pentoshi, a popular analyst and trader, thought this theory was out of place.
“If you have an impending crisis, keep interest rates at zero and add capital to make it worse. A recent Twitter update discussed “Stagflation”.
Mohamed El-Erian, an economist, stated that these risks occur at a time when Fed policy flexibility and liquidity can be patchy.
Liquidations pass $500 million
The derivatives funding rates fell sharply due to the day’s events. Traders weighed the possibility of further downside.
Related: Bitcoin price is facing ‘time uncertainty’ as last Bitcoin support levels exceed $20K
The action was confirmed by data from analytics provider Coinglass, as well as cross-crypto liquidations exceeding $530 million within 24 hours.
Chart of Bitcoin futures funding rates. Source: Coinglass
Research firm Numbrs also added that the evidence of “heavy” sales by shorters was evident.