Bitcoin (BTC) is starting a new week as a deep geopolitical nightmare unfolds in Ukraine.
As the retaliation for the invasion of Ukraine intensifies and the macroeconomic fallout intensifies, cryptocurrencies are pretty much trying to keep up.
A strange paradox arose this month. While investors and those directly affected by the war are looking for a safe haven, this has not been seen in bitcoin or even stack coins.
Instead, stocks hit by the sanctions and their aftermath are now an important guide to how BTC/USD is doing.
As such, Bitcoin’s trend remains lower, still in the same well-known macro area that characterized all of 2022.
What can change the situation? Cointelegraph looks at several factors to watch out for when a unique European conflict erupts.
General forces point to unstable ‘tough’ week
Regardless of historical precedents, it has become clear that the stock market “doesn’t like” today’s European fighting.
Losses intensified last week as the total value of global stocks fell below $2.9 trillion. Add to that the warning that the indicators still seem too expensive for the current environment, and the half-hearted image starts to look rather unappetizing.
Not only what actually happened has rocked the boat, but also the new sanctions against Russia, among which there are some serious problems that will only be felt in the longer time frame if they are implemented.
Among them is a ban on Russian oil imports, a move to reverse the global status quo, and a dramatic shift in how we power the economy.
“If it happens. I think there will be a high probability of capping stocks immediately after the news,” noted trader and analyst Bentoshi responded to the news about the idea that fell out this weekend.
Bentoshi has already sounded the alarm about rising stocks, raising the concept of a Wall Street-type crash event that ushered in the modern-day counterpart of the Great Depression.
While this is an extreme scenario, there is little cause for optimism as the conflict remains unresolved and the recession worsens.
For Mike McGlone, head of commodities strategist at Bloomberg Intelligence, bitcoin’s intraday performance means that the coming week should already be “tough” for risky assets.
Comparing BTC/USD to the Nasdaq, especially this year, McGlone had no idea that the only way was to fall.
“Bitcoin will face deflationary forces after excesses in 2021, but the cryptocurrency is showing mixed strength,” some Twitter comments said on Friday.
“With losses less than half of the Nasdaq 100 index in 2002, bitcoin has the potential to become a global digital security.”
CME Gap up to $40,000 for a rematch
In this case, Bitcoin traders will face difficulties in the coming days.
Sensitive stocks, combined with high commodity prices and what some say is a stagflation climate under scrutiny, are unlikely to create fertile ground for bullish sentiment.
Overnight on Sunday, BTC/USD fell to $37,592 on Bitstamp, hitting its lowest level since the end of February, completely nullifying subsequent gains.
What is even more disappointing is that the entire move was a repeat of the previous move, consolidating the current price range as more concrete support and resistance.
A look at the daily chart from Cointelegraph Markets Pro and TradingView shows how stable the range is – you need a break above the $46,200 yearly open to break out of it.
1-day BTC/USD light chart (bit mark). Source: Trading View
For trader Matthew Hyland, the immediate picture is that such a move is unlikely.
On Monday, he warned that “Bitcoin has fallen below its critical support area,” highlighting various price levels that he claims represent a range of support and resistance.
The latter — around $39,600 — coincidentally matched Friday’s closing price in CME Group’s bitcoin futures market.
Given Bitcoin’s trend back to Friday’s close next week, the just under $40,000 area could be centered on Monday, laying the groundwork for a support/resistance reversal if the bulls gain strength.
Cointelegraph contributor Michael van de Poppe summarized: “Bitcoin’s big choppy move, but it will eventually bounce back to Friday night’s CME closing price.”
In a subsequent tweet, van de Poppe joined McGlone in anticipating a “vulnerable” week ahead.
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