Bitcoin traded at $42,709, making a 0.7% profit. Critical support has been maintained by the first cryptocurrency in market capital, although it was rejected near its mid-range levels.
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Per a recent report from Bitbank’s crypto analyst, Yuya Hasegawa Bitcoin has seen selling pressure triggered by the possibility of a shift in monetary policy from the U.S. Federal Reserve (FED). Additionally, there is a possibility that the crypto market might be reacting towards the rising tensions in the Russia-Ukraine area.
Although the Russian Federation made several positive announcements about cryptocurrencies, Hasegawa claimed that the country may be planning to make use of digital assets in the event of a conflict with Ukraine or a NATO intervention. An analyst stated:
(…) this move may be a crafty preparation to circumvent the possible financial sanction–like exclusion from the SWIFT–that could be enforced once the country starts to attack Ukraine. The move could cause damage to bitcoin and the whole crypto industry.
Bitcoin’s gains could be extended in this situation as investors purchase the cryptocurrency and precious materials to preserve their wealth. But any gains could be short-lived, if the Russian Ukraine situation affects the U.S stock market.
Material Indicators’ data suggests that Bitcoin might see support at $41,000 as the $10 million bids placed are sitting there. If previous levels fall, $40,500 can mitigate the downside, while $39,700 acts as the final line of defense to prevent a return at previous lows.
Bitcoin has major opposition as over $20,000,000 in ask orders are sitting at $44,000. This could hinder any bullish momentum. However, it could also serve as a psychological barrier that could be removed in the event of market strength.
Bitcoin Investors Reduce the Risk of Their Positions
A separate report from Glassnode Insights concurs with Hasegawa’s thesis and the fears about a potential conflict between Russia and Ukraine. These uncertainties were priced-in by the derivatives sector with the “futures term structure curve until March”.
Bitcoin and crypto investors de-risk futures positions. They have also been using put options to hedge against possible downsides. Glassnode has added:
The on-chain supply dynamics remain remarkably stable. This is an indication that investors prefer derivatives over traditional methods to manage risks. This is a sign of Bitcoin’s maturation, with more sophisticated risk management tools becoming available and liquidity increasing.
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Spot sector inflows and BTC-on-chain inflows appear to favor the bulls, dismissing fears about the Ukraine-Russia crisis.