Bitcoin bounces back, markets worry less about Russia-Ukraine crisis Bitcoin bounces back, markets worry less about Russia-Ukraine crisis
After a weeks-long bearish trend, bitcoin and the overall cryptocurrency market bounced back on Wednesday. The crypto market is showing renewed confidence after dipping in response to ongoing Russia-Ukraine tensions.
3 min read
Updated: Feb. 23, 2022 at 4:29 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Bitcoin and the rest of the crypto markets are continuing to struggle, with the bitcoin price trading down from the weekly high of $44,274 on Wednesday last week, down below the psychological $40,000 level at $36,629, as per data from Goingecko. At the moment of writing, BTC price is hanging just below $39,000, up 3.3% on the daily.
The general sentiment in both Bitcoin, and traditional markets, seems to be a reflection of risk and uncertainty associated with the U.S. Federal Reserve rate hikes expected to be implemented in March, and continue throughout the rest of the year. There are also continuing fears of conflict in Ukraine, as well as uncertainty around the development of unrest in Canada and elsewhere.
Additionally, Germany has halted the Nord Stream 2 pipeline, an $11 billion project meant to ferry natural gas directly from Russia to Germany.
Probability of sustained bear market expected to increase
Analysts at Glassnode are raising red flags if the traditional and crypto markets continue to go deeper into a negative sentiment.
“As the prevailing downtrend deepens, the probability of a more sustained bear market can also be expected to increase, as recency bias and the magnitude of investor losses weighs on sentiment. The longer that investors are underwater on their position, and the further they fall into an unrealized loss, the more likely those held coins will be spent and sold,” Glassnode’s weekly newsletter reads.
At the moment, however, markets seem to have a temporary field day. Several major coins are trading upwards today after the market took a beating on the possibility of Russia invading Ukraine previously this week. In response to Russian President Vladimir Putin’s threats, several countries, including the U.S., U.K, France, and Japan, have announced sanctions against Russia, its top political leaders, and banks.
Terra and Avalanche on the rise
The markets appear to have interpreted the latest geopolitical developments as less worrying than previously expected, with investors worldwide temporarily moving risk-on.
The two top cryptocurrencies by market cap, bitcoin (BTC) and ether (ETH), both jumped on Wednesday, but were outperformed by layer-1 coins such as Terra and Avalanche which have gained 13.3% and 12% respectively.
Terra’s rally comes after the team announced a $1 billion private sale of its LUNA tokens to build a Bitcoin-denominated reserve for its stablecoin, UST. The aim of the deal is to make UST more stable with the help of bitcoin backing, which may be a positive catalyst for the LUNA token.
“The most extreme discount for bitcoin”
Meanwhile, some analysts are adding to the positive sentiment. Bloomberg’s Senior Commodity Strategist Mike McGlone, posted a tweet picturing BTC’s sheer buying opportunity.
“About 20% below its 50-week MA [moving average], Bitcoin is approaching too-cold levels that have often resulted in good price support. Our graphic depicts the most extreme discount for the crypto vs. its annual average since the 2020 and 2018 lows. On 22 February, the Dow Jones was close to parity,” McGlone tweets.
About 20% below its 50-week ma, #Bitcoin is approaching too-cold levels that have often resulted in good price support. Our graphic depicts the most extreme discount for the crypto vs. its annual average since the 2020 and 2018 lows. On Feb. 22, the #DowJones was close to parity pic.twitter.com/SXUaEv0jow
— Mike McGlone (@mikemcglone11) February 22, 2022
What McGlone seems to be saying is that the stock market might be more vulnerable than bitcoin, at least for the moment. Also, on-chain analysis firm Whalemap added some stats to supplement the argument. Bitcoin wallets, for instance, saw heavy inflows over the past four months.
Areas of whale interest are very well defined now.
34k awaits below 36-37k
Macro trend reversal above $48,500
Picture below includes everything one should know about current important supports and resistances pic.twitter.com/yx38hpfY9a
— whalemap (@whale_map) February 22, 2022
Overall, markets are momentarily a bit happier today, but the storm clouds on the horizon have not cleared. Geopolitics and macro markets are still very uncertain of the immediate future, and chances are high things can turn nasty in Ukraine, Canada and elsewhere. In the U.S. markets are waiting for the president’s executive order on cryptocurrencies, and we still don’t know exactly how Fed’s actions will play out.
Bitcoin Market Data
At the time of press 4:29 pm UTC on Feb. 23, 2022, Bitcoin is ranked #1 by market cap and the price is up 2.24% over the past 24 hours. Bitcoin has a market capitalization of $729.23 billion with a 24-hour trading volume of $21.07 billion. Learn more about Bitcoin ›
Crypto Market Summary
At the time of press 4:29 pm UTC on Feb. 23, 2022, the total crypto market is valued at at $1.74 trillion with a 24-hour volume of $12.3 billion. Bitcoin dominance is currently at 41.86%. Learn more about the crypto market ›
Author 
Laszlo Dobos
Educated in computer engineering, Laszlo began developing an interest in crypto and blockchain technology back in 2013.
