On Tuesday, Bitcoin dropped to $36,500 after Russian President Vladimir Putin declared two rebel-held areas of eastern Ukraine to be independent republics and demanded Russian soldiers to enter.
While Moscow says that the forces in Donetsk & Luhansk are now on a “peacekeeping” operation, US officials have dismissed this notion.
The West fears it is an “effort to create a pretext for a new invasion” that could lead to a wider military campaign in Ukraine.
On the suburbs of Luhansk, tanks and armored vehicles have been spotted, and Western nations are poised to enforce sanctions on Russia.
The deterioration of the situation is slowly spreading throughout international markets, not just cryptocurrency. Russia’s stock market plunged 8%, and European financial markets opened down as well. BTC has fallen 6% in the last 24 hours, putting it on track for a 16 percent drop in the last 7 days.
While Ether has lost 8% of its value since yesterday, smaller altcoins have suffered much worse. XRP, Cardano, and Solana, all three cryptocurrencies, were down around 14%.
The performance of BTC refutes the assumption that it acts as a secure base for investors seeking security during instances of market volatility.
On the other hand, Gold has mostly retained its gains, while the price per barrel of oil has risen. In a research report, 22V Research’s John Roque wrote: Bitcoin has gradually fallen and is significantly underperforming its arch-enemy, gold, in the world’s current tempest.
Bitcoin Is Close To Fall Below $33,184
BTC is very close to going below $33,184, which would be a new low for cryptocurrency. In addition, ongoing uncertainties could drop the world’s most valuable cryptocurrency below $29,000, a level it hasn’t been since January 2021.
Since the last summer, Bitcoin hasn’t fallen below the psychologically optimal point of $30,000. What needs to be included is whether or not buyers would be willing to fill in the gap.
BTC’s fate appears to be linked towards how Wall Street responds to Russia’s future actions, given how strongly the cryptocurrency is now linked to the stock market. Boris Johnson, the PM of the UK, said that data indicates the Kremlin is planning “the largest conflict in Europe since 1945.”
In a research report, OANDA analyst Edward Moya wrote:
“Bitcoin’s rollercoaster ride won’t end anytime soon, but it could get ugly if Wall Street sees a major selloff if investors begin to expect a prolonged military conflict.”
Russia recently disclosed plans to authorize cryptocurrency investments for its residents, but it still prohibits the use of digital assets as a payment mechanism. Meanwhile, a proposal to authorize cryptocurrency has been enacted in Ukraine, with the nation’s deputy PM claiming that this will assist Ukrainians “guard their assets against any exploitation or abuse.”