Bitcoin (BTC) Starts a New Week Amid a New Geopolitical Struggle – What are the Major Hurdles Investors Face?
In what has become an unrecognizable macro environment compared to a few days ago, Bitcoin, like many other assets, is under pressure.
The situation in Ukraine is causing chaos in global markets, and events can change sentiment within hours or minutes.
Time has also affected Bitcoin – the quality of the safe haven is seriously tested as investors seek safety and stockholders look for a way out.
As a major influence this week, Cointelegraph looks at what Bitcoin can expect in the short term when it can withstand complex and almost surreal macroeconomic developments.
Five topics for BTC investors this week can be found below.
Ukraine war dominates
Needless to say, the Russian-Ukrainian conflict is the main driver of market dynamics this week.
The situation, which appeared in its current form only five days ago, is still in flux – sanctions keep on appearing, both sides and their allies continue to capitulate, and markets are responding to new threats and opportunities.
Most important among them is the Russian economy, which is bracing for turmoil on Monday. Shares were canceled that day and the outlook for the currency, the ruble, which is already trading at a record low, is disappointing.
Negotiations will start on Monday, and any glimmer of hope could lead to a sharp change in the outlook in the short term and thus change the face of the market.
But while uncertainty prevails, everyone will be looking for a safe haven, and the use of bitcoin – whether it be ordinary Russians and Ukrainians or their governments – is already a topic of debate.
As reported by Cointelegraph, Ukraine has already raised millions of dollars in crypto aid. In addition, Vice President of Ukraine Mikhail Fedorov called for exchanges to block the funds of Russian and Belarusian users.
Podcast host Preston Beech wrote over the weekend, summarizing the situation: “Bitcoin is like a surgeon’s knife or a criminal’s knife.”
“Like all valuable technologies at all times, value is determined by the intent behind use.”
In the meantime, markets are likely to move based on changes in ground developments and spillover effects on governments.
So far, oil – not Russian oil – has been among the few that have benefited from the war, while Bitcoin has managed to maintain its stability to some extent – unlike gold, which first rose quickly and then lost all of its new strength.
However, the relationship between bitcoin and altcoins with traditional stock markets remains, so lower time frames can be a real headache for traders, no matter which way the war takes place.
Spot price faces total force majeure
With traditional markets poised to be very volatile at the opening of the respective Mondays, it is a real challenge to guess how Bitcoin will perform in the short term.
Regardless of the correlations, Bitcoin has managed to stay within a fairly tight range so far, and $40,000 is a clear resistance area that the bulls must overcome.
However, the problem is that any more severe action can wind up as a result of significant macroeconomic changes and thus become an unreliable long-term signal.
“Down about 4% on Sunday at 5:00 AM ET (February 27) compared to Friday, bitcoin points to a difficult week for risky assets,” warned Mike McGlone, chief strategy officer at Bloomberg Intelligence.
Meanwhile, popular Twitter account Decodejar notes that current levels represent a so-called checkpoint over the past 15 months, with $38,000 showing high volume compared to other price points in the current range.
Mikael van de Poppe argued that “when it comes to bitcoin, the playing field seems very simple.”
“The consolidation comes after the bullish move last week. If you really want to see more momentum, the retracement shouldn’t be too deep, so $38.1K to $38.2K should hold. Then we can go up to $44K.”
Since the US markets are not yet open at the time of writing, the picture may change completely before the end of Monday.
A comparison with March 2020 can be instructive – at the time, Bitcoin was initially in line with global markets, but it is back again as an asymmetric rate that sends traders into an uptrend never seen before in the next nine months.
