Bitcoin (BTC) starts a new week in the shadow of a new geopolitical conflict — what are the main hurdles that investors face?
In what has become an unrecognizable macro-environment compared to even days ago, Bitcoin, like many other assets, is feeling the pressure.
Russia’s invasion of and subsequent war against Ukraine is wreaking havoc on global markets, and developments can upend sentiment within hours or just minutes.
The timing has hit Bitcoin, too — its “safe haven” quality is seeing a serious test, as investors look for safety and fiat bagholders look for an exit.
As the overriding influence this week, Cointelegraph takes a look at what might lie in store for Bitcoin in the short term as it holds up against complex and almost surreal macro events.
Five topics for BTC investors this week can be found below.
Ukraine war dominates
It goes without saying that the Russia-Ukraine conflict is the main driver of market performance this week.
The situation, having only arisen in its current form five days ago, remains in a state of constant flux — sanctions keep coming, both sides and their allies continue to knuckle down, markets react to new threats and probabilities.
Chief among them is Russia’s economy, which is bracing for turmoil on Monday. Stock trading has been pushed back to at least 3 pm local time, and the prognosis is bleak for its currency, the ruble, which is already trading at record lows.
Talks are scheduled to begin Monday, and any glimmer of hope could cause an about-turn in the short-term outlook and thus change the face of markets.
While uncertainty rules, however, everyone will be looking for the ultimate safe haven, and Bitcoin’s use — whether by ordinary Russians and Ukrainians or their governments — is already a talking point.
As Cointelegraph reported, Ukraine’s army has already raised millions of dollars in crypto aid, and far-reaching sanctions against Moscow could yet facilitate a pivot to Bitcoin as an economic tool.
The idea has not passed the establishment by — Mykhailo Fedorov, Ukraine’s deputy president, called on exchanges to block Russian and Belarusian users’ funds.
“Bitcoin is like a knife to a surgeon or a knife to a criminal,” podcast host Preston Pysh wrote at the weekend, summing up the situation.
“Like any valuable technology throughout time, its value comes from the intention behind its use.”
Markets, meanwhile, will likely be driven depending on shifts in events on the ground and knock-on effects for governments.
Urals med crude (russian oil) vs brent pic.twitter.com/ePk6V7cSCu
— Zhu Su (@zhusu) February 28, 2022
So far, oil — but not Russian oil — has been one of the few beneficiaries of the war, while Bitcoin has managed to remain fairly stable — unlike gold, which first gained rapidly and then lost all its newly-won ground.
Bitcoin and altcoins’ correlation to traditional stock markets remains, however, and low timeframes are thus apt to provide a real headache for traders regardless of what turns the war takes.
Spot price action faces macro force majeure
With traditional markets poised to be extremely volatile on their respective Monday opens, guessing how Bitcoin will fare on the shortest timeframes is a real problem.
Correlations aside, Bitcoin has so far managed to remain in a fairly tight range, and $40,000 is a clear resistance zone for bulls to beat.
The problem, however, is that any more dramatic move could ultimately come as a result of major macro changes and thus be an unreliable longer-term signal.
“Down about 4% on Sunday am 5:00EST (Feb. 27) from Friday, Bitcoin is indicating a rough week for risk assets,” Mike McGlone, chief commodity strategist at Bloomberg Intelligence warned.
A popular Twitter account meanwhile noted that current levels represent the so-called point of control (PoC) for the past 15 months, with $38,000 seeing large volumes relative to other price points in the current range.
“When it comes to Bitcoin, the…
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