Bitcoin (BTC) has surged since the opening of Wall Street on Feb. 24, with the Russian invasion of Ukraine and its aftermath still high on the market agenda.

BTC/USD 1-hour light chart (bit-mark). Source: Trading View
Risk sentiment to become ‘dominant driver’ in cryptocurrency
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD approaching $36,400 on Bitstamp two hours after the open, to $2,000 since the last drop.

Dirty markets clashed with music related to Russia’s invasion of Ukraine overnight, and the move continued and reverberated through global trade.

It is not surprising that the Russian stock market faced another shock: the Moscow Exchange lost 50%, and trading at some point completely stopped.

Bitcoin, which suffered earlier in the day, nevertheless made a respectable comeback.

“At the beginning of the week, the escalation of tensions between Russia and Ukraine seriously affected the crypto markets. Our crypto indices have already shown significant losses across all sectors,” Sahel Al Sahrani, a market analyst at cryptanalytic firm Macro Hive, told Cointelegraph.

Al-Sahrani warned that the announcement of further sanctions against the Russian economy could further escalate the situation and that Bitcoin’s connection to traditional stock markets should not be overlooked.

“The news worsened with the apparent Russian invasion of Ukraine, then the European Union, the UK and the US proposed further sanctions against Russia,” he continued.

“Risk aversion is likely to be the dominant theme in the markets. With Bitcoin and Nasdaq once again in correlation, broader risk sentiment is likely to become the dominant driving force behind crypto markets.”
Another battleground has been that the US Federal Reserve is potentially holding back interest rate hikes due to the conflict.

But to the well-known trader and analyst Benucci, this theory seemed out of place.

“If you have an imminent zero-rate recession and you add more capital, you will get something worse. stagflation,” reads a recent Twitter update.

On the topic, economist Mohamed El-Erian said such risks “arise at a time when Fed policy flexibility is limited and liquidity is volatile.”

Liquidation exceeded $500 million
Meanwhile, today’s events have sent derivatives funding rates into negative territory as traders weigh the possibility of several downsides.

Related: Bitcoin’s latest $20,000 support comes as bitcoin price faces ‘uncertainty time’

Data from analytics source Coinglass confirmed the action, as well as the liquidation of the cryptocurrency, which reached $530 million in 24 hours.

Bitcoin futures funding price chart. Source: Coinglass
Data analytics firm Numbrs added that “big” short selling is evidence of this.

Source: CoinTelegraph