Bitcoin (BTC) starts a new week in the shadow of a deepening geopolitical nightmare unfolding in Ukraine.
As retaliation for the Ukraine invasion and the macroeconomic consequences grow, crypto by and large is struggling to keep up.
A curious paradox has presented itself this month. Despite investors and those directly impacted by the war assumedly looking for a safe haven, that has broadly not been Bitcoin or even stablecoins.
Instead, stocks, which have taken a hit thanks to sanctions and their consequences, now form a major guide for how BTC/USD performs.
As such, the trend for Bitcoin remains down, all within the same familiar macro range which has characterized all of 2022.
What could switch things up? Cointelegraph takes a look at a handful of factors worth keeping an eye on as the unprecedented European conflict plays out.
Macro forces signal volatile, “rough” week ahead
Historical precedent aside, it has become clear that the stock market does not “like” the current European hostilities.
Losses mounted last week, with global equities in total shedding $2.9 trillion of value. Add to that a warning that indices still seem expensive for the current environment and the midterm picture starts to look decidedly unappetizing.
It is not just what has already taken place, which is rocking the boat, but new sanctions against Russia are on the table, among them some serious issues that would only be felt on longer timeframes, should they come to fruition.
Among them is a ban on Russian oil imports, a move set to upend the global status quo and trigger a seismic shift in how the economy fuels itself.
“If this happened. I would think there’d be a high probability of stocks limiting down immediately off the news,” popular trader and analyst Pentoshi reacted to news of the idea that dropped over the weekend.
Pentoshi had already sounded the alarm for stocks going forward, raising the concept of a Wall Street Crash-type event triggering a modern-day counterpart of the Great Depression.
While an extreme scenario, there is nonetheless little to be bullish about while the conflict remains unresolved and the fallout worsens.
For Mike McGlone, chief commodity strategist at Bloomberg Intelligence, Bitcoin’s intraday performance meant that the coming week should indeed be “rough” for risk assets.
#Bitcoin May Revisit $30,000, But What of the #stockmarket? Down about 2% on Sunday morning 8am EST from Friday’s close, Bitcoin is indicating another rough week for risk assets – pic.twitter.com/FEj7hLQ08j
— Mike McGlone (@mikemcglone11) March 6, 2022
Comparing BTC/USD to the Nasdaq, in particular, this year, McGlone did not have the opinion that the only way is down.
“Bitcoin faces deflationary forces after 2021 excesses, but the crypto shows divergent strength,” part of Twitter comments read Friday.
“With 2002 losses less than half those for the Nasdaq 100, Bitcoin may be maturing toward global digital collateral.”
CME gap sets up $40,000 rematch
Should that be the case, Bitcoin hodlers are in for a choppy ride in the coming days.
Sensitive stocks combined with rocketing commodities prices — an atmosphere of stagflation in the making, some say — hardly provide fertile ground for bullish sentiment.
Overnight on Sunday, BTC/USD wicked down to $37,592 on Bitstamp, marking its lowest levels since late February and wholly erasing its subsequent gains.
Even more frustrating is that the entire move was a repeat of a previous one, cementing the current price range as more definitive support and resistance.
A look at the daily chart from Cointelegraph Markets Pro and TradingView shows just how persistent the range has been — in order to exit it, a breakout above the yearly open at $46,200 is needed.
For trader Matthew Hyland, however, the immediate picture suggests that such a move is unlikely.
“Bitcoin has fallen below the crucial support zone,” he warned on Monday, showing…
Read More: cointelegraph.com