Temporal support for Bitcoin at $39,000 has been found, however buyers are scarce in the current weekend-price action. The uncertainty around macro factors appears to be increasing with the Russia-Ukraine war contributing to the selling pressure experienced by BTC over the last days.
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Bitcoin is trading at $39,168, with a loss of 4.2% in the last 24 hours.
Before the recent downturn, some of the benchmark cryptos saw relief. Research firm Delphi Digital found that Bitcoin activity soared in response to the Russian invasion Ukraine.
America, Europe and the International Community voted to expel the Russian Federation (SWIFT) from the Society for Worldwide Interbank Financial Telecommunication. These are the communications rails that banks use in their legacy financial system. Effectively, making Russia a financial outsider.
See below.It is possible to, when the sanctions were announced, Bitcoin’s active supply saw it largest surged since May 2020. Global markets fell sharply after the announcement of lockdown measures designed to stop the spread COVID-19.
The increase in Bitcoin active supply may indicate that buyers have increased their reserves to protect themselves against any future developments. Brian Armstrong and other CEOs of cryptocurrency exchanges reported that BTC, and other cryptocurrencies, have been utilized by local people to move wealth safely across border borders.
Delphi Digital provided further data that seems to support the thesis. For example, addresses that had balances of between 0.001 & 10 BTC held more BTC than 2.73 million. Research firm addedThese are the things:
Cutting off the Russian Ruble from the world’s financial system led to a sell-off, causing it to drop 20% over the weekend. BTC emerged as one alternative to the ruble in Russia’s efforts to maintain its value. BTC was able to trade with an incredible 40% premium.
Bitcoin is a Make or Break Moment
NewsBTC reports that Bitcoin must maintain a balance of at least $40,000 in order to avoid further decline. With the loss of critical support, it seems that a possible return to $36,000 is likely.
Material Indicators’ data supports this thesis for at least lower timeframes. This is because there appears to be little liquidity at present levels up to the price point. The chart shows that there is approximately $18 million worth of bids for Bitcoin at $36,000.
For the moment, all levels are weak until that time. To the upside, the order book seems equally thin, but without buying pressure it seems unlikely that BTC’s price will make a push upwards, for the time being.
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According to a pseudonym analyst, BTC’s price benefited from the “safe haven asset narrative”, but that momentum seems to have been extinguished. Talking about the potential opportunity to buy BTC’s dip into future lows, giving the asset’s possible capacity to reclaim previous highs, the analyst said:
(…) we’d need a push above $46K to continue it’s bullish trend which won’t be easy either after such a fall (…). As for $BTC’s direction I’m a bit conflicted on what’s next. There is still some chance of a reverse but we have to lose the current level. The bulls must pull through the weekend. The weekend will see more chop than usual.